2018 Tax Return

Just last week I was able to submit our tax returns for 2018 and it looks like we can be expecting a combined refund of about $4,300!  With all the renovations going on - it really couldn't come at a better time (despite the adage of this really just representing an interest free loan to the government).

The plan is to use it to knock back our Line of Credit so we can get that paid off ASAP. The LOC mostly has leftover expenses from our back yard landscaping this past summer.  Once we use the tax refund it'll take us just another month or two to get it completely paid off (again).  

Just for fun - here's a picture of the hottub/pergola/fence that we did over the summer which had a bit of an overrun. 

If you're expecting a tax refund this year, what are your plans for spending/saving it?

It's Tax Time!

This year I'm doing taxes for myself, for Jordan, my great aunt, my grandparents and my deceased grandmother too.  They are all pretty straight forward, but I am learning a few new things.

For us, the big thing is finishing the claim on our moving expenses.  We moved in 2015, but our house didn't close until 2016.  So, we  are able to claim the real estate fees, holding costs and other pieces of the sale against income in 2016.  All that is to say, we're looking at a combined refund of about $9,000.  This is fantastic news, because our line of credit debt is sitting at about the same.  It'll feel great to have that cleared off the table.  It'll just leave the Kia and the Mortgage as our only debts.

Tax Refunds

It took some time, but I finally got our tax returns prepped and submitted.  This year was a bit more complicated than others because we were able to make a claim for moving expenses.

The tricky part though, is that Jordan moved for work in 2015, but the house didn't sell until 2016 - so we have to split the expenses across two tax years.  I'm using TurboTax again this year, but needed to spend some time on the phone with the CRA before I felt comfortable going forward.

I have a sizeable spreadsheet and a pile of receipts that document things as much as possible.  Fingers crossed I did it correctly as I've read that moving expenses often prompt CRA to ask for more information or even to audit.

We're looking at a refund of around $4,000!  Woohoo!

Do you have a refund coming your way?  Have you already received it?

Tax Time!

I love tax time.

I've just gone through and triple checked and then submitted our tax returns.  We use TurboTax - for under $30 at Costco, it makes filing sooo easy.

I used to do our taxes by hand first, and then use TurboTax - just in case there were discrepancies...and there never has been.  So this year, I just used the Tax Software to skip that step.

We're ear marking the entire refund to our Baby Fund - that will bring us sooo close to being at 100%.  It will feel so good to hit that goal so early on in the year, and then we can look to the next goal we can achieve.

So, where is the refund coming from?

Well we were actually both under taxed by our employers to the tune of $300 when I first entered in our T4's.  The refund is coming from:

• Medical Expenses - Jordan's second tooth implant and benefit premiums from both employers
• RRSP Contributions
• Pension Adjustment
• Professional Membership Dues
• Interest on Investments
• Educational Credits (I was still in school the first few months of 2014)

How are you guys fairing in your tax returns?  Do you owe?  Are you getting a return?  If you're getting a refund, what are you going to do with it?

Taxes! Do Them!

It boggles my mind how many people don't keep their taxes up to date; especially when they have super standard; nothing to write home about taxes to complete.  We're talking a T4, maybe 2 and an RRSP or school deduction.  Seriously.  It's not hard.

It just so happens that the last two activities in Level 4 of My Money, My Choices to get this years tax return done and catch up on any previous years.  Jordan and I are all caught up; but I can't say it's always been that way.

When I met Jordan, we were 19 I think, and he had several years of taxes to do....like 4 or 5.  So, I sat down on his living room floor (tax software wasn't as popular then); and did them all.  I think payment was my choice of movie and he had to cook me dinner.  Though once he got his cheque in; he took me out.

I was floored that he hadn't done them, and really wasn't worried about it; this of course comes from your influences growing up.  Now, I can't say that Jordan gets excited as I do, but he's happy for me to get them done, and happy to get those tax returns every year.  I don't submit them by hand any more, typically I use TurboTax because I have three returns to do (mine, Jordans, and my grandmothers) and my mom and I often share the license for hers too, but I still usually do a practice run pen/paper style just to make sure everything lines up correctly.

Tax Time!

As soon as January rolls around, I started to get excited for tax season.  I picked up a copy of TurboTax from Costco for $28 on an awesome sale and we got our taxes finished and submitted during the first week of March.

This year we had deductions for the interest costs for an investment in company shares, educational credits for me going back to school not to mention the regular deductions for RRSP/Pension contributions and professional memberships.

We're received a refund of $494.64 for me and $1,400.97 for Jordan for a grand total of $1,895.61 last week.

$1,200 went straight to debt snowflakes, $500 was split between Vacation, Christmas, and Home Maintenance Planned Spending and then Jordan and I split $200 for some mad money.

What are you going to do with your tax return?

Income Tax

Who's excited to file their income taxes this year?

I am!

In fact, I've already done a 'dry run' and come up with a net return of about $1,000 (just for me, not including J).  Now I just have to wait for my T4 to get it done properly.

Question for you all - do you use online tax return software or do you do your taxes by hand and mail it in?

Property Taxes

Up until today, we have been going on the assumption that our property taxes would be about $2,000/year - this is based on what our builder had been telling as about property in the area - so our budget has reflected a monthly amount of $167.  Thinking about it, this was probably a good guess based on the house before upgrades and on the 2010 tax rate.

I had some time to call the City's tax office today and learned quite a bit about how the taxes are calculated/adjusted.

When a new home is built, the taxes are based on purchase price of the home (including GST, down payments, and upgrades - not including CMHC insurance) - that would make our approximate tax bill for 2011 $2,104 - that divided by 12 gives us monthly payments of $175. I'm not sure what the 2012 tax rates will be, so this is the value we've used to sign up for monthly payments to the city.

Because we only owned our home for 6.57% of the year, we we owe approximately $138 for the 2011 year - the payments above are for 2012 while we wait for the adjustment notification that we and our home builder will have to sort out. 

When the new property assessments come out in the spring, we'll find out the City's assessment of our homes value and adjustments will be made for payments from June through to December.  That could mean that for the remainder of the year our tax bill goes up, or down, depending on if we over or under guessed when signing up for the monthly billing cycle.

You might asked why we signed up for the monthly payments instead of paying annually.  Unlike vehicle insurance, there is no interest charged for setting up a monthly payment program vs paying in a lump sum - the only drawback is that we lose out on a very slight amount of interest if we had been putting the money away in a savings account when the annual bill came due.  For us - with home ownership being so new, we thought the monthly plan suited us best.

If you are a homeowner, do you pay your property taxes annually or monthly?  Why?

Taxes are Complete & Filed

Phew!

That was one other thing I accomplished over the weekend.  I did my, Jordan's and my grandmother's taxes.  I've used QuickTax for the last several years and so love how easy it is.  You can use their Easy Step process which asks you a bunch of questions or you can just fill out the forms page by page.  I normally really like the Easy Step - but this year it was like they had dumbed it down so much it was confusing! I went back and forth quite a bit between Easy Step and Forms to make sure I had done everything correctly - but after using the software for so long, it was pretty simple.

Our refunds will be just about the same - we're each getting about $440!  Not too shabby. My grandmother is getting about $2 back (she has no income, just receives government benefits).

We had originally planned on putting that money towards our house fund, but we're both concentrating on getting our debts paid off - so instead Jordan's will go to the truck loan and my refund will go to my Canada Student Loan.  It'll feel pretty great to put a lump sum on the debt like that.

It will move Jordan's debt free date up a month to June, 2010 from July, 2010 and make my journey to being debt free in 2010 that much easier.

Canadian Taxes - Where Does Your Money Go?

JD over at Get Rich Slowly posted an article  today about the United States of America's taxes.  I thought I would dig up a little information on Canadian Taxes.

For the fiscal year (2007-2008), Canada's federal government recorded $242.4 billion in taxes and other revenues.  The largest expenditure of that money, is DEBT!  Debt costs our country $33.3 billion dollars, annually.  That's about 14 cents of each tax dollar!  The Department of Finance Canada, actually as a pretty great interactive website that explains where all the money went.  Here's a link!

That link tells us a great story about our federal taxes, but I'm curious about our provincial taxes and our sales tax as well.

I will use my salary as an example of how taxed we, as Canadians, are.  I am currently living in the province of Alberta, and will use their guidelines for provincial calculations.  To make it easier, I will base my calculations on the assumption that I have no RRSP's or other means to reduce my taxable income (which I do)

I have calculated the provincial and federal taxes I will owe on my income based on the rates provided by the Canada Revenue Agency.  Those rates are listed here.

The goods and service tax (GST) is a tax that applies to the supply of most goods and services.  In Alberta, we are charged 5% on top of just about everything we buy.  Assuming that I spend approximately $1,500/month on variable (taxable) consumption.  That would be  $75/month or $900/year spent in GST.

Here's a little graph:

Wow!  Talk about a HUuuuge argument to do as much as you possible can to reduce your taxable income!  Just about $12, 500 of my annual salary is gobbled up by taxes, and that's with fairly conservative estimates!

So how can we reduce our taxable income, so that we pay less taxes?

1. Contribute to RRSPs!!  Keep in mind, this is only a tax deferring vehicle.  You will pay taxes on this money when you take it out after you retire, although in theory at a lower tax rate.
2. Open a TFSA.  Tax free savings accounts are fantastic vehicles for your emergency fund.  Keep in mind that you don't pay taxes on the INTEREST earned.  You do pay taxes on the money deposited each year.
3. Have you been going to school?  There are a great number of deductions available for post-secondary students
4. Do you own a small business?  Look into the ways to reduce your taxable income using business 'write offs'
5. If you already donate to charity, keep and track those receipts, and claim it!

There are so many different ways, however; each person has their own unique set of circumstances.

How do you reduce your taxable income?  Do you think you pay too much, or too little in taxes?

I will be credit card debt free in 3 days!!

Borrowing to Contribute to RRSPs

I have a LOT of RRSP contribution room, well, I think it's a lot. My 2009 limit is $13, 116. Now while I wouldn't borrow the full amount - I wonder about the advantages of 'catching up' when it comes to RRSPs.

I read an article on CanadianParents.com, called Borrowing to Contribute which was written by Gail Vaz-Oxlade - and she supports it, big time! In reading the article, it would seem that the benefit does outweigh the interest you would pay. This is of course, only if you pay off the debt within one year and re-invest/pay off the RRSP loan with any refund you receive.

The latest I will start my Company Pension Plan in October, 2010, though I'm going to try to negotiate starting this in October, 2009. It becomes vested two years after I start, which means two years after I start, the company cannot take back the money they've contributed. I want to be 'caught up' within the next couple of years or so, to really start taking advantage of compound interest. I don't want to wait until my company pension plan kicks in (due to so many variables) to start seriously contributing.

Have you ever borrowed to contribute? What was your experience with that?

I will be credit card debt free in 11 days!

Notice of Assessment

Does anyone ever read their notice of assessment? It's that peice of paper you get in the mail once you've filed your taxes that says how much the government is giving you / how much you are going to give them. It summarizes the taxes filed and it gives you the following years RRSP dedcution limit.

I've contributed to RRSP for some time now (though withdrew in 2008 which was a HUGE mistake) but i've never really looked that this limit before. My limit is $13,116. If I were to max that out it would be just over $1300/month *not going to happen* right now I depost $120/month. Hmm... It's a thought though.

I wonder if I should be investing more. Right now, I think that it's not a good idea... I'm currently putting about 21% of my income into savings... GVO reccomds 10%

Perhaps once my visa is paid off. What are your thoughts?

Refund Time!!

Well, I got my tax refund, and promptly put $1500 towards my visa debt, which has my highest interest rate at 11% plus an annual fee of $23 (which as soon as I pay off the card, I will get rid of the fee, I won't need it to secure the interest rate).

Tax Refund

I don't think that anyone actually read what I write - but if there is anyone out there, I'm curious, what do you all plan to do with your tax refund? save? spend? pay off debt?

Lets here it!

Tax Time

I wanted to say a few words about tax time as well...

I think I'm going to get a refund of around $1500... and it's ALL going to hit my Visa... i'm just waiting for a few more Tslips and it should be a go. I have to tell you, it's going to feel so very good to have such a big chunk of that credit card paid off!!