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Lexicon posted:If you mean contribute but don't take the deduction until later - this is a reasonable option, but most people in my experience aren't organized enough to implement this properly. But if you can, by all means. Yeah, he's already contributed 29K. He's asking if he should claim the deduction or not. I don't think he's going to forget about 29K of amounts carried forward so in his case, organization probably isn't an issue.
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Feb 27, 2015 22:09
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It still seems like unless I plan to use all my deduction up next year, it may be better to get less back now, but invest it. Guess it is finally time I do some math. 10k deduction claimed at 21% (10k-40k) rate = 2.1k 10k deduction claimed at 31% (40K-82K) rate = 3.1k So looking at 3 years, I would need it to grow 14% each year to match waiting to deduct when I'm in the 31% bracket. Year 1 = 2.4K Year 2 = 2.7k Year 3 = 3.1k Takes about 8% growth each year over a 5 year period. Of course after doing some more math on when, and how much I'll be in the higher bracket, assuming: 10% raise each year (conservative side of what my manager has planned) 160 hours of OT for the year (very conservative) Making the max RSP contribution each year (still won't hit the limit for matching) Using deductions to bring my taxable income down to 40k each year I'll be right back at 29K of unused deductions at the end of 5 years, which could have been in a TFSA. Even jumping to 320 hours of OT (half what I did last year) I'll still have 2.5k of deductions left.
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Feb 28, 2015 01:43
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Golluk posted:It still seems like unless I plan to use all my deduction up next year, it may be better to get less back now, but invest it. Guess it is finally time I do some math. How about you contribute the 10k now, grow for 3 years, THEN (assuming you are getting your 10% raise each year) claim the deduction against your income that is taxed at the 31% bracket. This way you get the 3 years of growth (whatever they turn out to be) in addition to the higher deduction. http://business.financialpost.com/2013/02/22/the-difference-between-an-rrsp-contribution-and-deduction/
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Feb 28, 2015 02:11
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Mantle posted:How about you contribute the 10k now, grow for 3 years, THEN (assuming you are getting your 10% raise each year) claim the deduction against your income that is taxed at the 31% bracket. This way you get the 3 years of growth (whatever they turn out to be) in addition to the higher deduction. I think your assuming I'm asking if I should contribute to the RSP. I'm asking if I should claim the deduction. Either option, that 10k is in an RSP, invested, and growing for 3 years. But do you claim the deduction immediately, get a 2.1K return, invest it in a TFSA for 3 years to also grow, or, do you wait 3 years to claim the deduction on taxable income in the 31% bracket, getting 3.1k, to then put in a TFSA and invest. Both methods carry uncertainties. How well do the markets do? Do I actually break into the 31% taxable income bracket in 3 years to claim the deduction, depending on overtime, raises, still having a job. Golluk fucked around with this message at 05:13 on Feb 28, 2015 |
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Feb 28, 2015 05:09
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Golluk posted:I think your assuming I'm asking if I should contribute to the RSP. I'm asking if I should claim the deduction. Either option, that 10k is in an RSP, invested, and growing for 3 years. But do you claim the deduction immediately, get a 2.1K return, invest it in a TFSA for 3 years to also grow, or, do you wait 3 years to claim the deduction on taxable income in the 31% bracket, getting 3.1k, to then put in a TFSA and invest. Ah, I got it. Personally I would claim the deduction immediately and get that money in market. If you want to hedge, you can do 50% now and 50% later when you anticipate you will be earning income in the higher bracket.
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Feb 28, 2015 05:55
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The CIBC from all people decided to get in the ETF game, if just for a little while: https://www.investorsedge.cibc.com/ie/features/etf-offer.html Their commission is now $6.95 anyways, and ETF transactions are commission free for the next months. Good time to start or transfer in kind and rebalance for free.
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Feb 28, 2015 08:59
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The start of 2014 was a bit more hectic than usual for me as I was just starting a new job, the first 3 months of which were on contract and earned EI in one lump sum for 3 months of unemployment in 2013. Since my income in 2013 was less than expected because of this, I ended up contributing a bunch to my RRSP but left the deduction for this year due to the extra load on my income taxes. Being a responsible, mature Canadian, I'm once again planning my contribution well in advance. (  )My plan, as usual, was just to punch in all my numbers in Dr. Tax and eyeball the deduction so as to end up owing 0 taxes. But now I'm reading that this might not be the smartest plan and I should probably put some of this in a TFSA instead. Now, every year I slowly improve my understanding of this whole deal (and end up forgetting most of it by the next tax season). But I think I'm at a stage where know just enough to hurt myself with a terirble decision. I'd like some insight on deciding RRSP vs. TFSA. Some of the main key points which might be relevant: - I already have both a RRSP savings account and TFSA savings with Tangerine, both with more contribution room than I have savings to put in - I also have a decent amount of money also being useless in a non-registered savings account - I'm currently in the 44k-85k tax bracket and that's highly unlikely to change within the next 5 years - I have enough in unclaimed deductions and idle savings to go down the 44k bracket - I'm planning to move most of this useless savings money into a mutual fund/ETF over the course of the next month - My general long term plan was to put enough in my RRSP to reach the $25k threshold for HBP, then max out my TFSA contribution room, then back to the RRSP - I have zero outstanding debt that should be paid off e:- Don't have an employer RSP matching plan I suppose the immediate short term question is whether it's a sound idea to go on with my previous idea to claim enough deductions to cancel taxes owed due to contract income and EI. Jan fucked around with this message at 23:18 on Feb 28, 2015 |
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Feb 28, 2015 20:39
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Filing my taxes through StudioTax and I'm totally mindfucked at the moment. I am wondering if this is even possible. Filed Married, seperately. Made roughly 65k. Contributed $6600 to my RRSPs for 2014 and whenever I enter that into StudioTax, it changes my refund by 2k roughly. (From 2k to 4k.) Tax deducted for the 65k was 12k. This possibly can't be right can it? lol internet. fucked around with this message at 22:53 on Feb 28, 2015 |
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Feb 28, 2015 22:50
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My first question would be if your new employer offers any kind of RSP matching or pension. If yes, then: Contribute to the RSP until you max out your employers matching contribution. Contribute to the RSP if your still above the 85k taxable income mark. Max out your TFSA. Max out your RSP (assuming you get more/equal contribution room than employer matching each year) If no employer matching, then: Contribute to the RSP until you get below 85k taxable income Max out your TFSA Max out your RSP At least that would be the conventional wisdom, and keeping 3 months living expenses in a high interest saving account. I'm not really sure how best to advise based around the desire to use the HBP, other than possibly contributing to your RSP, but only deducting down to 44k taxable income each year, until you hit the 25k. And going with conservative funds if you plan to buy within the next 4-5 years. My own situation is odd due to a somewhat unique employer matching system.
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Feb 28, 2015 23:08
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lol internet. posted:Filing my taxes through StudioTax and I'm totally mindfucked at the moment. I am wondering if this is even possible. Really depends on how much your employer was deducting from your pay. Going by Ontario numbers, after the credit (~10K), you'd be at 55k taxable income roughly. Assuming your employer deducted exactly right, we'll assume you owe no taxes. Next you contribute, and deduct 6600 to your RSP. Your taxable income would be down to 48.4k, and you would have paid 31% tax on that 6.6k, which should get you a return of 2k. After the ~10k credit Taxes paid on the first ~42k would have been 8.8k Taxes paid on the remaining ~13k would have been 4k Total taxes owed before deductions, 12.8k Sounds about right to me. The federal and provincial brackets and tax credits don't line up exactly, so I averaged. And of course the provincial taxes/brackets vary.
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Feb 28, 2015 23:20
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Thanks, I never contributed to RRSPs before so the jump in 2k after adding the RRSP seemed strangely odd to me. Also, I plugged the numbers in uFile which strangely didn't add the 2k. I did just try plugging the numbers into SimpleTax and the contributions did change the refund by 2k. I guess I might of did something wrong in uFile.
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Feb 28, 2015 23:37
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Golluk posted:My first question would be if your new employer offers any kind of RSP matching or pension. If yes, then: I knew I was forgetting something really important in my bullet point list. No RSP matching, we're a tiny company and I'm surprised we even got collective health insurance this year. I'm not really sold on the HBP, I saw it as a way to gain the benefits of RRSP deductions while still being able to use that money to buy property if needed. But if I don't really need the deductions, seems like a TFSA is a more versatile option that will allow me to do just the same. Now I'm more bothered by the insane amount UFile is coming up for the Quebec Pension Plan for my 3 month contract. According to it, I should pay as much for that 3 months than for the 8.5 months I was employed. Even taking into account the ridiculous amount to pay the QPP as an independent worker, I just can't figure out how they come to that number. e2: Great, SimpleTax doesn't support Quebec income tax. Got to love being the special snowflake province with its own overpriced tax system. 
Jan fucked around with this message at 23:56 on Feb 28, 2015 |
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Feb 28, 2015 23:47
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Yeah, I have little interest in trying to figure out cpp/qpp stuff. I have enough to use the HBP, but the requirement to pay it back if I become unemployed scares me away from ever really using it. TFSA seems a better choice, even if it takes 21-31% longer to save up a down payment. Due to not getting tax refunds.
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Mar 1, 2015 00:25
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Does anyone have a handy guide to the best Canadian credit cards? I read this entire thread, and I'm sorry if I missed it, but I've finally been working at my first full-time job for almost 8 months (after 6 years of university and 2 years of college). Hell, I literally bought my first smartphone today. I'm 28, still living with my parents, only really spending money on lunch and the odd purchase, so I'm planning on paying off my OSAP and max out a TFSA as soon as possible. Long story short, I'm looking for a general first-time credit card that would allow me to build some good credit and get some good rewards. I certainly don't plan on keeping a balance on it. Also, I work as a staff accountant in a tax accounting office, so I can at least add my voice to some of the more general tax questions that are asked (though I usually work on small corporate returns). I may not be able to answer questions 100%, but I can at least point in the general direction.
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Mar 1, 2015 04:27
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mojo1701a posted:Does anyone have a handy guide to the best Canadian credit cards? I read this entire thread, and I'm sorry if I missed it, but I've finally been working at my first full-time job for almost 8 months (after 6 years of university and 2 years of college). Hell, I literally bought my first smartphone today. I'm 28, still living with my parents, only really spending money on lunch and the odd purchase, so I'm planning on paying off my OSAP and max out a TFSA as soon as possible. http://forums.redflagdeals.com/best-cashback-credit-cards-1670301/
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Mar 1, 2015 04:42
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mojo1701a posted:... Mind weighing in on my questions a few posts up about when to claim RSP deductions?
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Mar 1, 2015 05:19
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cowofwar posted:MBNA smart cash mastercard (2% cash back gas/groceries) or scotia momentum visa infinite (4% gas/groceries but needs 60k income). Thanks, I'll definitely have to take a look at that. I'm still banking with Scotia, and when I finally switched my savings account to a high-interest one, I mentioned that I'd probably be looking for a credit card. After having read this thread, I'll have to politely tell them, "Thanks, but no thanks." Unfortunately, I don't quite qualify for $60k yet. Maybe once I get my CPA (I'll be registering for that soon). Golluk posted:Mind weighing in on my questions a few posts up about when to claim RSP deductions? To be honest, I'm not sure that I could say much more. I'm still trying to think as to whether or not the future tax savings are worth the loss of current investing power (one of the rules of financial planning is that tax planning is always a secondary concern). I'm still relatively new to the gig, so I don't really deal with RRSPs all that much, and I'd rather not say anything stupid (or worse, useless or obvious). In fact, I'd say that if someone disagrees, please let me know. I'm here to learn more than anything. If anything, I can ask my boss or a coworker on Monday. Like I said, my job's mostly corporate returns (and I don't do super-complicated ones yet). As for the HBP, it's not the best idea because of the payback restriction, but if you think it won't be a problem, it's a better idea than taking money out of a TFSA since either way, you'll be losing out on investment gains, and the RRSP's will eventually be taxed anyway.
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Mar 1, 2015 06:20
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mojo1701a posted:Thanks, I'll definitely have to take a look at that. I'm still banking with Scotia, and when I finally switched my savings account to a high-interest one, I mentioned that I'd probably be looking for a credit card. After having read this thread, I'll have to politely tell them, "Thanks, but no thanks." Scotia and high interest don't exactly go together. I'm going to assume since it sounds like you are doing mainly NTR's you are with a small firm and not big 4. Good luck with the CPA program. This merger's such a joke.
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Mar 1, 2015 06:39
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Sassafras fucked around with this message at 09:10 on Mar 14, 2015 |
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Mar 1, 2015 06:53
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cowofwar posted:MBNA smart cash mastercard (2% cash back gas/groceries) or scotia momentum visa infinite (4% gas/groceries but needs 60k income). I prefer the Capital One Aspire Cash to the MBNA smart cash because I don't buy much gas / groceries (cycle / eat out a lot), the Capital One card gives good price protection and warranty benefits and doesn't have a monthly rewards cap like the MBNA card does. e: Also MBNA cash is only redeemable in increments of $50. Scotia Momentum has a $100 annual fee I think so I didn't consider it. Mantle fucked around with this message at 07:43 on Mar 1, 2015 |
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Mar 1, 2015 07:40
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Kal Torak posted:Scotia and high interest don't exactly go together. Well, it was originally just some bank accounts that my dad set up for me, and I've been coasting on it ever since (right now, it's a whopping 0.8% annual return). It was one of my first steps of getting everything sorted. I'm also looking at new banks right now, too. But for now, the credit card's a priority over that. Also, you're right. It's a small public accounting firm with about 4 people. Oddly enough, I've only been working there 8 months and I'm now technically the second-most full-time senior staff member. Sassafras posted:It's been a couple years since I surveyed the scene exhaustively, but back then, the very best credit card for people with lower incomes (15k requirement) was RBC's cash-back Mastercard. 2% on groceries, 0.5% --> 1.0% on everything else. Check it out here. Based on the very low income requirement, I assume that they issue it even to people with no significant credit history, but if not, you might be stuck just getting a mediocre no-frills one from Scotiabank and paying your bills reliably for 6-12 months before you can upgrade to something else. Well, my income's a little over $40k, so that should be no problem.
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Mar 1, 2015 15:05
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Jan posted:I knew I was forgetting something really important in my bullet point list. No RSP matching, we're a tiny company and I'm surprised we even got collective health insurance this year. I used http://turbotax.intuit.ca/tax-software/index.jsp forever before some changes in my tax situation required an accountant to do it. Never had an issue, and I've been filing for 18 or 19 years. It has the benefit of tracking you tax balances (RRSPs, capital losses, etc) over time and rolling stuff over year to year.
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Mar 1, 2015 17:23
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What software for accounting/taxe would be most appropriate for a small business? I amwatching my wife slowly go mad trying to do all of her bookkeeping on excel and is like to look into getting her other options as her health declines while sales increase rediculously annually
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Mar 1, 2015 22:51
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Bilirubin posted:What software for accounting/taxe would be most appropriate for a small business? I amwatching my wife slowly go mad trying to do all of her bookkeeping on excel and is like to look into getting her other options as her health declines while sales increase rediculously annually I'm in a similar position as my wife works from home and runs her own business. I find Quicken Home & Business meets my needs: http://quicken.intuit.ca/personal-finance-software/home-and-business.jsp
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Mar 1, 2015 22:59
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Kal Torak posted:I'm in a similar position as my wife works from home and runs her own business. I find Quicken Home & Business meets my needs: This is what I was going to suggest as well.
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Mar 1, 2015 23:39
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Since we're talking about this, if your tax situation isn't too complex I highly recommend SimpleTax (https://simpletax.ca/). It's free, the UI is great (better than TurboTax's in my opinion), and you can literally do your taxes in like 15 minutes. I used it the last couple of years that I lived in Canada and it was great.
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Mar 2, 2015 02:41
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blah_blah posted:Since we're talking about this, if your tax situation isn't too complex I highly recommend SimpleTax (https://simpletax.ca/). It's free, the UI is great (better than TurboTax's in my opinion), and you can literally do your taxes in like 15 minutes. I used it the last couple of years that I lived in Canada and it was great. Someone upthread specifically mentioned that simpletax doesn't cover what seems to me a pretty common item. Turbotax is a robust product and if you pay attention you can usually get a sale through your bank or employer. Both BMO and TD have offered 30% off deals for turbotax the last couple years I used it. Dunno about this year.
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Mar 2, 2015 03:33
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We've used Turbotax for years and still might but I'm thinking of using one of the free solutions mentioned on Revenue Canada's website for our personal taxes this year http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/crtfdsftwr/menu-eng.html http://www.studiotax.com/en/?page=1 and http://www.genutax.ca/
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Mar 3, 2015 19:19
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This year will be my fifth using StudioTax. It's great! I usually still enter my information into TurboTax to see if there's any discrepancies, because you can do that for free. They've always matched up though.
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Mar 3, 2015 19:33
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I think this year we'll try to do our taxes our selves rather than pay a guy. What's the easiest free software for a couple with simple as poo poo returns?
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Mar 3, 2015 20:06
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Sassafras fucked around with this message at 09:11 on Mar 14, 2015 |
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Mar 3, 2015 20:11
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Is there any reason to be concerned about the business model of Simpletax? The whole pay-what-you-want thing? I suppose TurboTax is hardly any better, but at least there's an ostensibly sensible business model underpinning it all.
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Mar 3, 2015 20:50
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I am a little paranoid of those 100% online services. I realize that all my banking info is already on the net, but I'd rather not give it to more companies and depend on them than I need to. I'd far rather have a stand alone local application.Sassafras posted:Offline, studiotax, but I think it really sucks at joint returns, usability-wise. Actually, who am I kidding, Mrs. Slidebite will give it a try. I might download both for her to play with.
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Mar 3, 2015 21:09
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I always used UFile.ca and then ran it through TurboTax to double check and I haven't had an issue, other than I forget I always have $1 of unused Tuition credit each year that could really pay off.
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Mar 3, 2015 21:17
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slidebite posted:That's too bad, but I'll probably give it a try anyhow. I'm terrible at accounting and use it to do mine and my wife's taxes with o difficulty.
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Mar 3, 2015 23:40
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I'll plug genutax, it's a free/donate what you want bit of software that's had no problem taking care of my out of country joint returns. It supports pseudo income splitting too and is easy to use and even caught one year when I owed money.
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Mar 4, 2015 00:09
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Franks Happy Place posted:I'm terrible at accounting and use it to do mine and my wife's taxes with o difficulty.
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Mar 4, 2015 01:29
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slidebite posted:... wife loves accounting so it's a no brainer. She got a University Accounting Certificate for fun. I'm trying to decide if that qualifies her for the "Bad with money" thread, but then she has a certificate saying she is good with money? I'm left undecided.
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Mar 4, 2015 02:54
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Nah, I don't think it cost her much between scholarships, tax benefits and a generous educational allowance from her employer.
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Mar 4, 2015 03:57
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Are there any EFTs which are heavily weighed on fixed income from countries like New Zealand where 1 year interest rates are in excess of 4%? http://www.interest.co.nz/saving/term-deposits-1-to-5-years I realize currency fluctuation can impact that significantly but more curious than anything at this point.
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Mar 4, 2015 17:29
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