OUR ADVICE COLUMN

How to mess up your Wealth Building Strategy

                    You could pay too much income tax. You could under contribute to your RRSP. You could contribute to your taxable investment account instead of your RRSP or TFSA. You could pay high interest costs on debt where the interest costs were not tax deductible. You could amortize your mortgage over a long period of time. You could ignore the management...
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Pre-Retirement Consolidation

15… That’s the number of jobs the average Canadian will have during the course of their working lives. That often leads to multiple bank and investment accounts at a variety of financial institutions which can be costly, confusing and inefficient. Discover the many benefits of account consolidation in the following investor article. The wisdom of account consolidation Now...
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Spring Into Tax Season

As the deadline looms for filing your 2013 tax returns, be sure to take advantage of the tax credits and deductions you are entitled to. Here are some common ways to reduce your tax bill:

Income splitting - pension splitting, spousal RRSPs, spousal loans
RRSPs
Spousal/Partner/Wholly dependent person credit
Child Care Expenses/Summer camps
Fitness and Child Activity Tax credits for children under the age of 16
Student credits - tuition, education amount, textbooks, interest on student loans
Disability credits and the Registered Disability Savings Plan
Medical Expenses - combine your family's medical expenses and choose your 12 month period
If unused, some tax credits can be transferred to your spouse, parent or grandparent. As the Canadian tax system is very complex, I recommend consulting a qualified tax professional for advice. You may find that the tax savings far outweigh the fees.

Once your taxes are filed, it’s time to consider what to do with the tax refund. So what is the best thing to do?

Pay down debt
If you have taken out an RRSP loan use your refund to pay it down. Get rid of your credit card debt. High interest on credit cards can derail anyone’s financial plan. Start with the highest rate first and then look for ways to transfer any remaining balance to a lower interest card or consolidation loan.

Lump sum mortgage payment
Using your tax refund to make a lump sum payment toward the principal of a mortgage could save thousands of dollars in interest over the term of the mortgage.

Top-up TFSA
Contributing to a Tax-Free Savings Account (TFSA) allows money to grow tax free. If you have maxed out your TFSA room, you have another $5,500 for 2014.

Save for education
RESP contributions can earn grant money from the government to boost the savings you’ve set aside for your children's future. A $2,500 contribution to an RESP can earn a $500 grant from the government.

Take a vacation

If you have all of the above under control, and your financial plan is on track, then use your tax refund to spend some quality time with your family. While interest payments and taxes can be quantified, memories of family vacations are priceless.

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Protecting Your Family

If you have life and disability coverage, you probably believe you’ve done all you can to protect your family in case something happens to you. But there may be a strand missing from your personal safety net. Suppose you are told you have cancer and need to start treatment immediately. You have disability insurance, but the...
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