Financial Goals for the New Year for Income

Do you have any financial goals for the new year?

One of mine has to do with where my income is coming from.

An approximation of my income from 2012 is:

• 79% from primary job.
• 12% from secondary job.
• 5% from self-employment.
• 4% from EI (I was on maternity leave for the month of January)

This is gross income from jobs, not including benefits and gross EI payments. Self employment is income after expenses (but not including cell phone, and before out of home expenses)...otherwise it would currently be registering at 0% because my cell phone and out of home expense deductions would wipe it all down to 0 taxable income!

I'd like to be able to have that first amount of income from primary job drop to about 70%.  My hope is that I can increase the self-employment amount from 5% of my income to about 15%.  Self-employment including cell phone expenses would be even better!

Tax Withheld on RRSP Withdrawals

If you are in Canada, and are at a point where you need or want to withdraw money from your RRSP, please ensure that you are familiar with the rules of withdrawing it.

I've had a few income tax clients over the last couple of years who have been surprised to owe money on their income tax.  The primary reason these particular clients owed money was because they withdrew money from their RRSP's but the bank/financial institution did not withhold enough tax on the withdrawal for their financial situation.

Minimum Tax Withheld on Withdrawals

The minimum tax that is withheld is dictated by Canada Revenue Agency.
If you take $5000 or less out, they withhold 10% in taxes.
If you take between $5000.01 and $15000 out, they withhold 20% in taxes.
If you take more than $15000 out, they withhold 30% in taxes.

(Note: These are the numbers for all of Canada, except Quebec, which withholds slightly more.)

Add to Income

The amount that is withdrawn gets added to your income tax as income.  If you have other income from other sources (employment, investments, etc.), it is quite possible you are will need to have more money withheld for taxes! Or, alternatively, ensure that you are saving the money that you will owe on taxes in something that is earning you a bit of interest in the meantime.

Be Aware. Know Your Circumstances.

As long as you are aware of your circumstances, there will be no problem! You will make sure that either the bank or yourself withholds enough taxes so that you are not surprised come income tax filing time.

The problem is if you are not aware, and all of a sudden you realize that you owe a bunch of money as a result of withdrawing money from your RRSP's and you weren't aware that this would happen.

No one likes finding out that they owe money to the government.

Have you been surprised to owe money when filing your taxes?

Have You Made the Most of Your Benefit Plan?

Have you thought about your benefit plan at work recently? Most benefit plans run on a calendar year, which means the benefits you can use in one year end on December 31.  Even though we are only at the end of October, the end of the year will come quickly!

I am extremely fortunate to work for an agency that still provides health benefits to their permanent employees who work more than 24 hours/week.  Ideally, I would love to work 16 or 20, but I work 25 hours a week with this employer in order to maintain access to the benefit plan.

I realize that not everyone has access to a benefit plan, but if you do, you should make sure you are using it!

By using your benefits, you could be using services like:

• Accupuncture
• Chiropractor
• Dentist
• Glasses or Contacts
• Massage
• Naturopathy
• Nutritionist
• Optical Services
• Orthodontist
• Orthotics
• Personal Counselling
• Prescription Drugs

If you pay into your benefit plan from your earnings, make sure to claim this amount as a medical expense on your income taxes.  Sometimes the amount is listed on your T4 slip, and sometimes it is on your last paystub for the year.  Also, for any services that are not 100% covered, the portion that you pay that is not covered can also be considered a medical expense. 

I've already booked monthly massages for November and December in order to make use of my benefit plan.  Take a look into the details of yours, and make sure you are using them!

Activia/DanActive Danone Class Action Lawsuit in Canada - Are You Eligible?

As you may have read, earlier this week I received a cheque as a result of the Mattel class action lawsuit.

On the same day, Monday September 24th, the Toronto Star had a large ad in it stating that there is a class action lawsuit against Danone regarding health claims in advertising for Activia Yogourt and DanActive probiotic drinks.  They had an article about it in the Toronto Star on Tuesday.  You can read it here. 

Numerous Canadians are eligible to be part of the settlement of the this lawsuit and will receive between $15 and $50.  However, in order to qualify, you must have purchased the products, and must submit a claim.

It all comes down to this:

• The advertising stated that the products could aid digestion and/or help colds. 

• A class action lawsuit for the same issue has already been won in the US for the same issues. 

• The settlement should be finalized in court on November 6, 2012. People will have up to three months after that date to claim, and the cheques are supposed to be sent out to claimants within 60 days after that. You are looking at a payment date of up to 5 months after November 6, 2012. 

• If you have receipts of products purchased between April 1, 2009 and November 6, 2012, in the amount of $15-$50, you will receive your money back. 

• If you have receipts of purchase of products in the same timeframe of less than $15, you will receive $15. 

• If you don't have receipts, but will sign an affidavit that you purchased the products, you will receive $15.

If you qualify and are interested in being a part of the settlement of this claim, remember to send in your claim form.

Here is a link to the form that you need to send in, either by mail, or electronically.

http://www.collectiva.ca/en/dossiers/documents/Claimform.pdf
http://www.collectiva.ca/en/dossiers/documents/Claim_Form_Dynamic.pdf

I personally have never bought these products, nor do I intend to over the remaining claim period, but thought many of my readers would be interested in this info.

Mattel Canadian Class Actions Settlement Received

When my daughter was younger she loved Polly Pockets. She's almost 11 now, so she's outgrown this stage. Sad, but true! As a result of her loving them, and being great playtoys we had many in the house.  There was a recall on a number of the sets back in 2006/2007 due to tiny magnets coming out of the toys.

I put together all the pieces from each set that was recalled (not an easy task if you know how small they are!) and ended up returning them, postage paid, and received a credit voucher to be used towards other Mattel products in the value of $53.00. 

A year ago, I received both an email and regular mail about a class action lawsuit that was happening regarding this recall against Mattel/Fisher Price.  Since my name was in the database from returning the toys, I was already a part of the lawsuit. (Who knew?)

I wrote about this last August, in a blogpost on my personal blog.

I'd pretty much forgotten about all of this, but today, 6 years after the initial recall, and one year after hearing about the class action lawsuit, I received a cheque for $26.50, which is 1/2 the value of the original credit.

Virtual Visa Debit from RBC

A month ago I received a new Virtual Visa Debit card in the mail from RBC.  I did not apply for it.  It just...arrived.

The card is meant to be used as a "new way to pay for online, telephone and mail order purchases.  Payments are debited directl from your RBC Royal Bank personal deposit account."

I put it aside, trying to figure out why it would have been sent to me.  You see, I have absolutely no reason or incentive to use this card!

Yes, I absolutely make online purchases. However, I already have a credit card that I'm comfortable using for online purchases.  I even get points on this credit card to redeem for stuff later.

Not everyone has a credit card.  I think this Virtual Visa Debit card is perfect for those who don't.

• For those who have chosen to not be tempted into debt and have stayed away from having a credit card.  
• For those who don't have a good enough credit rating to get a credit card.
• For those who are under 18 and are not old enough to have a credit card.

There are times when not having a credit card can be a real pain for those who don't.  Hotel and vacation booking is one, since you wouldn't be able to use any of the online booking companies (Hotwire, Priceline, Booking.com, Hotels.com etc), or even be able to book directly through a hotel website.

This new card fills a gap in the market for those looking to be able to buy online and don't want to bother their friends or family members to give them cash in order to have them purchase the desired item online.

I won't be using this card myself, and will not be activating it, but I do see value in the card for others.  

Can you think of any other groups of people this card would be good for?  Would you be interested in using it?

Canada Learning Bond - Are Your Children Eligible?

I wrote about The Canada Learning Bond once before, back in 2008.  It was pretty new back then, having started in 2006. In 2006, only 4.7% of those eligible applied for this FREE money for their children's RESP.  By 2008, it had increased slightly, to 16.3%, and by 2011 had increased to 24.4%. 

You can see the totals of the participation rates broken down by province here.

At less than 25% of those eligible participating in the program, the program is still highly unknown.

I think post secondary education is important, so as a tax preparer, this year I am going to try to emphasize this program to my clients who are eligible for it.

Directly from the HRSDC website, the Canada Learning Bond is:

Introduced in 2005, the Canada Learning Bond (CLB) targets low-income families and provides them with a financial incentive to save. Upon applying, the CLB is given to all children who have an RESP account and are eligible to receive the National Child Benefit Supplement (NCBS) in addition to the Canada Child Tax Benefit, commonly known as “family allowance.” The CLB does not require any contributions from parents and is deposited directly into the child’s RESP. Specifically, the Government of Canada provides an initial CLB of $500 to children born after December 31, 2003 plus an additional $100 per year until age 15 and up to a maximum of $2,000.

So...if you receive the National Child Benefit Supplement, your children are eligible for this! Head to your local bank and ask to open an RESP for your children and have them apply for the Canada Learning Bond for you.  The first year you do so, each child will receive $500, and each year after that you still qualify they will receive another $100.

Tell me:  Have you done this already? Are you planning to?  How can you go wrong!?

New Baby? Make Sure Your Income Taxes Are Done!

Are you expecting a cute new baby in your life or have a newborn?  Are your income taxes all complete and submitted?

You might be wondering what the connection between these two questions is!

The Canada Child Tax Benefit (CCTB)  is a payment from the Federal Government to help families with the costs of raising children.  The majority of Canadians are eligible for this program, but you MUST FILE YOUR TAX RETURN TO RECEIVE THEM!

Separate sub-programs that are also included in this payment are the:

1) National Child Benefit Supplement (NCBS) for lower income families

2) Child Disability Benefit (CDB) for families with children who are disabled and qualify for the Disability Credit.

Also, each province may have programs as well.  In Ontario, there is the Ontario Child Benefit (OCB).

Ok, lets get to what everyone wants to know.

How Much Money Will I Get??


Using the online calculators using 2011 net income, and assuming your children don't have disabilities, here we go.  For children age 6 or under you will also receive $100/month for the Universal Child Care Benefit (UCCB), and your amounts will be slightly adjusted from these, as these figures are not including the calculations if you received UCCB in 2011. The amounts include CCTB, NCBS, and Ontario Child Benefit. 

These amounts are for people in Ontario.

Net family income of $100 000/yr will receive$21.59/month for 1 child,   $ 43.18 for 2 children.
Net family income of $ 80 000/yr will receive $54.92/month for 1 child,  $109.85 for 2 children.
Net family income of $ 60 000/yr will receive $88.26/month for 1 child,  $176.52 for 2 children.
Net family income of $ 50 000/yr will receive $104.92/month for 1 child, $209.85 for 2 children.
Net family income of $ 40 000/yr will receive $144.60/month for 1 child, $335.95 for 2 children.
Net family income of $ 30 000/yr will receive $271.27/month for 1 child, $594.27 for 2 children.
Net family income of  < $ 20 000/yr will receive $390.15/month for 1 child, $759.40 for 2 children.

To get an estimate of your own situation, go to the CRA calculators.


File Your Taxes!

You cannot receive this money unless you have filed your income tax return.  If you havn't filed for a few years and are eligible for these payments, you can go back up to 10 years and file and you will still receive the payments owed to you.

Retail Price Adjustments in Canada

Have you ever bought something, only to be highly disappointed that it went on sale the next week because you purchased it at a higher price?

Many stores in Canada, particularly larger chains, have a "price adjustment" policy.  This means that if something goes on sale after you have purchased it, you can go back with your receipt and receive the difference of the price.  As an example, if you paid $100.00 for an item, and a couple days later it went on sale for $60.00, you could bring in your receipt, ask for a price adjustment, and you would receive $40.00 back. Nice, eh!?

Each store does have their own specific policies though, so it's good to research the policies for the stores you typically shop at.

Not ideal if you live rurally and the item is $5.00 cheaper since your gas costs getting back to the store would outweigh the difference, but for larger items it can make a big difference!  When I bought my laptop at Futureshop a couple years ago, I noticed it in the flyer the next week on sale, and was able to go back in for a fairly substantial price adjustment.

If it happens to be a store you shop at often, it might be handy to keep those receipts for smaller items in your purse to check back in case the items you bought is $5.00 less next week.

Very occasionally, you might even find a store clerk giving you the heads up that your purchase will be going on sale soon.  If you know the policies, you can buy it at full price, ensure you get the product before someone else buys it off the shelf, and come back for the price adjustment.

Knowing the policies for the stores you shop at is key! If your favorite store is not in my list of favorites, find the website, and the price adjustment policy is typically found within the returns policy, often in a link at the bottom of the website.

Here is the research for some of my top shopping destinations.
 

ADDITION-ELLE:

Price Adjustment Policy: We offer a one-time price adjustment within 14 days on items purchased at regular price. To receive a price adjustment for merchandise purchased online, you may call us at 1-888-385-8585. Note that price adjustments for merchandise purchased online can be received exclusively in this manner and cannot be received in-store.

AEROPOSTALE: 

To receive a one-time purchase adjustment, present your original receipt within 14 days of the original date of purchase.

THE BAY:

Price adjustments will be made with the original receipt, within 7 days of purchase.  Price adjustments will not be made for clearance merchandise.  

CANADIAN TIRE and MARK'S WORK WEARHOUSE:

These two companies are both owned by Canadian Tire, and I couldn't find any info on price adjustments with them on their websites.

FUTURESHOP:

 If our own price was reduced in the last 30 days.

• Present us with your original receipt.
• We will refund you the difference.

For purchases from futureshop.ca, and if there are no Future Shop stores in your area, you can contact us at 1-800-663-2275 or by email service@futureshop.com.

ROOTS:

Note:  The following is regarding online orders, but I'm guessing their in store policy is a similar 14 days.

Roots.com offers a one time only price adjustment on items purchased at REGULAR price within 14 days of invoice with your original invoice. Please include a note indicating the item and its new price.

From time to time we may run promotions where a price adjustment will not be available. If a price adjustment is not available on any given promotion we will state that fact on Roots.com Canada.

Send your original invoice postmarked no later than 14 days of invoice to:

Roots.com Canada- Pricing Adjustments
9133 Leslie Street,
Unit #120 Richmond Hill, ON
L4B 4N1

Please note we cannot accept photocopied invoices or packing slips and we will only credit the credit card used for the original purchase.

SEARS:

Note:  I couldn't find a policy regarding in store purchases, but I did find this one regarding catalogue and online purchases.  This one is interesting...will match not only their own prices but ones from other stores too, post-purchase!

We'll match any competitor's advertised price for identical merchandise offered
in Sears catalogues and on www.sears.ca within 30 days of purchase.

I hope this info has helped!  Have you ever used price adjustments to get money back on a purchase?

Overnight Summer Camp - You Can't Claim it All

I loved overnight summer camp as a kid.  It was the highlight of my year to go to camp for two weeks each summer. The camp I loved was pricey, in the Muskoka region of Ontario. I requested the "going to camp" experience each year instead of receiving birthday and Christmas gifts. (Ok, I still received some gifts, but smaller ones!)

My daughter started going to overnight camp last summer.  She also loves it!  But did you realize that you can't claim all of those overnight camp fees as childcare costs on your income taxes?

Camp IS childcare for our family during the summer, as it is for many others.  We use a combination of daycamps and a week of overnight camp.  All daycamp fees can be claimed, no matter the price, but there is a maximum on the amount you can claim for overnight camp.  This maximum amount is in need of being raised to a more realistic current amount.

The daycamp at the local university that my daughter looks forward to each year is approximately $200/week.  This can be claimed, no questions asked.  Even if it was $500/week it could be claimed, no questions asked.

However, for overnight camp for the 2011 tax year:

"The maximum you can claim for expenses that relate to a stay in a
boarding school (other than education costs) or an overnight camp
(including an overnight sports school) is $175 per week for a child
included on line 1 in Part B, $250 per week for a child included on
line 2, and $100 per week for a child included on line 3."

Line 1 equates to children 7 years and younger.
Line 2 equates to children under 17 who qualify for disability tax credit
Line 3 equates to children between 8 and 17 years old, or over 18 who qualify for disability tax credit.

For most "camp aged" children this means you can only claim $100 for the week of overnight camp, instead of the $200 that I pay for daycamp.

I decided to take a look back to see when this amount was last updated.

2001 (10 years ago).  Same amounts as 2011
1999 (12 years ago).  Same amount as 2011, with no disability option.
1998. (13 years ago)

"You can claim payments made to: individuals providing Child care services; day nursery schools and daycare centres; educational institutions for the part of the fees that relate to Child care services; day camps and day sports schools; and boarding schools, overnight sports schools, or camps where lodging is involved."

WAIT.  HOLD IT!!  What was that?? My parents could claim the full cost of overnight camp as a tax deduction for child care, but we can't?  UGH.

I get it, I do.  It's because the whole thing is lumped together as the upper class sending their kids to boarding school, and why should the upper class get a tax break for something that others can't afford.  I'm not disagreeing with that.

What I do think is that the rates need to updated.  That $100/week amount for children between 8 and 18 needs to be raised to $150 or $200/week.  There are absolutely no daycare providers in my area that would charge only $100 for full time daycare for one week, even for a school age child (infant and preschool spots typically charge more than school age to begin with). I've heard from friends that typical school age rates here (and I am NOT in a large city where rates can be much higher) are $30/day, or $150/week.

Will you join me in writing to your MP regarding raising the amount you can claim on your taxes for overnight camp to match what you would pay for daycare or daycamp?