Paying off their mortgage is a key goal for many Canadian homeowners. And paying down their mortgage faster often becomes a priority, given the financial freedom it represents. There are typically five reasons why people want to pay off their mortgage faster: To reduce the amount of interest paid. For the sense of freedom and peace of mind that come with owning your home outright. To be able to dedicate more money towards other financial...
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Did you know that over half of Canadians don’t have a will? And that number jumps to 70% for younger Canadians (aged 18-34) and 66% for those aged 35-54. This is even more surprising given that almost 60% of Canadians think they have a good level of estate planning in place. Many Canadians who do have a will are only scratching the surface of truly comprehensive estate planning. So, what is estate planning, exactly? Regardless...
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Exploring the myth that it’s always better to take a fixed over a variable mortgage When you’re looking to buy a home or renew your mortgage, one of the most important decisions you’ll have to make is whether to sign up for a fixed vs. variable mortgage. A common myth is that it’s always best to go with a fixed-rate mortgage. Up until fairly recently, many Canadians seemed to follow this advice, with around three-quarters...
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Moving expenses A full-time student may be able to claim the expenses required to move to the education institution, if they move at least 40 kilometres closer to the school. Moving expenses can include flights, rental of vehicles, and shipment of clothing and other goods to the institution. However, moving expenses can only be claimed against the taxable portion of scholarships, fellowships, bursaries, research grants or other similar income. Moving expenses can be claimed whether...
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Ensuring that your loved ones are cared for after your passing is a common goal for families. This is especially relevant where your loved one is a person living with disabilities. The challenge is – even the most well-intentioned gifts can have unforeseen financial implications. To ensure that your chosen beneficiary’s financial resources, such as social assistance benefits, are not diminished by any gifts, you may wish to consider using a Henson trust among other...
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It’s over a decade since TFSAs were introduced, but some people still don’t fully understand them. Here are six benefits of TFSAs that you should know about. When the tax-free savings account (TFSA) was launched in 2009, it was thought of by many people as a secondary saving account where people would mostly store short-term cash. Few people realized the greater benefits of the TFSA. It’s sure grown up since then. As the years have...
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HELOCs are becoming increasingly popular with Canadians, as they are flexible and easy to use. But what is a home equity line of credit, exactly, and how can you make the most of it? Canadians love to use home equity lines of credit (HELOCs). In 2021, the amount of money Canadians owed to HELOCs had risen to just over $260 billion . These lines of credit allow borrowers to access up to 80% of the...
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When you leave a job, options include taking a lump-sum pension payout or leaving your pension intact. These tips will help you choose the best option for you.
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Prescribed rate loans: Maximize a tax planning opportunity before July 1st Prescribed rate loans can be an excellent financial planning tool for many Canadians. They are one of the few remaining income-splitting strategies that could help you lower your family’s overall tax bill. While commonly used to split income between spouses, prescribed rate loans can also be used to efficiently split income with adult children or to fund family investment trusts. The prescribed interest rate...
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64% of business owners want to transition their business in the next 10 years. However, 51% feel the next generation is not ready and 39% worry the next generation is uninterested 1 . Whether you plan to keep your business in the family for sell to a third party, how can you ensure your business is ready for the sale? E nsuring your house (and business) is in order now is key to sustaining your...
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A Tax-Free Savings Account (TFSA) is a great tool to build wealth for most Canadians while paying less tax. Although there are many benefits to investing in a TFSA, there can also be costly mistakes. This article outlines the eight most common pitfalls people encounter and how to avoid them. 1) Avoid making a withdrawal and replacing the withdrawal in the same year You can make a withdrawal from your TFSA at any time without...
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Prescribed rate loans: An effective planning tool to reduce your overall family tax bill Prescribed rate loans can be an excellent financial planning tool and are one of the few income splitting strategies that remain for many Canadian families. The concept of income splitting encompasses any strategy that shifts taxable income from an individual with a higher marginal tax rate to a family member who is subject to a lower marginal tax rate. While commonly...
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Year-end tax planning tips for business owners When most of us think of year-end tax planning, we typically consider our personal situation. Yet, there are many tax-opportunities for business owners to explore as we near the end of another calendar year. The following tips assume your business is unincorporated or your corporation has a December 31 st year-end, although some tips may also apply to corporations with an off-calendar year-end. Review your salary/dividend mix: If...
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Transitioning wealth: How ready is your family? Did you know that many Canadians are not adequately prepared to pass on or inherit family wealth? This is often due to a lack of communication and planning. The good news is that it’s never too early or too late to start. Planning helps you identify tax-saving opportunities, mitigate potential financial gaps and maximize your current lifestyle. Here are 10 actions you can begin to take today. 1...
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As students begin to pay their tuition for the upcoming fall semester, it is important to know what fees and expenses can be deducted on this year’s tax return. This article will highlight some of the key deductions and credits that can help reduce your family tax bill for the 2021 filing year. Moving expenses A full-time student may be able to claim the expenses required to move to the education institution, if they move...
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When is the right time to begin taking Canada Pension Plan (CPP) benefits? A core component of your retirement plan is the CPP retirement benefit (or Québec Pension Plan for Québec residents, which mirrors many aspects of the CPP). CPP offers flexibility as to when payments can begin, which affects how much you could receive. Familiarizing yourself with CPP provisions can help you decide when to start payments and optimize the benefit throughout your retirement...
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The lifetime capital gains exemption (LCGE) is one of the key tax planning advantages available to small business owners, farmers, and fishers. In 2021, it can exempt from tax up to $892,218 of capital gains realized on the sale of shares of a qualified small business corporation and up to $1 million of capital gains realized on the sale of shares of a family farm or fishing corporation. Until recently, existing legislation made it difficult...
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Working from anywhere: Tax implications and other watch-outs In response to the COVID-19 pandemic, employers have embraced an environment where employees work from home. With the opportunity to work from home, some Canadians are taking the opportunity to work from anywhere. For some, that means working from the cottage or working from a foreign location. Before you switch from working from home to a location of your choice, there are a few things that you...
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While attention is often focused on funding retirement and wealth transfer to the next generation, susceptibility to fraud often goes unnoticed.
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If you have woken up in the middle of the night to a money-related panic attack, do not worry - you are not alone. It is natural for us to worry about our financial situation as it dictates so many facets of our everyday life. Nevertheless, financial stress is a big deal and needs to be addressed. Money driven anxiety is also becoming a growing concern for the younger population. Millennials are taking out larger...
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Time certainly goes by fast. One day you’re interviewing for your first job and the next thing you know you’re a few short years from applying for Old Age Security. If you’ve planned for your retirement, you’ll likely have a good stash of funds saved. But the unfortunate news is that according to the Insured Retirement Institute , 42 percent of baby boomers have nothing saved for retirement, and even those that have saved...
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