Are Contest Wins Taxable In Canada?

Are Contest Wins Taxable in Canada?

In Canada, anything you win through a contest is NOT taxable!  You do not have to claim it as income on your income tax.  However, if you earn money, and invest it, the interest you earn on the principal are taxable, unless you invest in a Tax Free Savings Account (TFSA).  

Increase Your Income Through Contests!

You probably won't win straight up cash (but you might!), but you can win gift cards, products and experiences!  These "extras" are a great way to increase your income, especially if the prize is for something you would have already spent money on!  You can then allocate that money to somewhere else in your budget.  

You can also win for things that are above and beyond what your normal spending habits would entail.  For example, I have won tickets to concerts (eg one of favorite Canadian jazz bands Manteca) and sporting events (eg FIFA U19 when it was in Toronto) that I love to attend, but can't justify spending money on regularly.

But...I Never Win Anything.

So many people don't enter contests because they assume that they won't win anything.  But you CAN'T win anything if you don't enter!  So enter! Enter contests for that have prizes of things that you would use or would like. (Or that you know someone who would use the prize!)  Don't enter for things that you don't want.  Leave those contests to be entered by those who will actually appreciate the prize if they win!

What Have You Won? What Would You Like to Win?

What have you won?  I want to know! Tomorrow I will share with you a list of things that I have won in the last six months. 

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!

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!?