This week’s Federal Budget had plenty of election goodies for everyone, which I have already done some commenting on, but the RRIF allowance changes is an interesting choice for the Tories to choose as a plank in their Election Platform. For the opposition it is the Tories pandering to the Rich Retirees who want to avoid taxes, but to me, it just looks like the Government figuring out that folks are living longer and taking that into their calculations. The other nice thing is with the larger TFSA room, if seniors are frugal and save some of their money, they can grow it in their TFSA, and not get double whammed on their taxes (i.e. taxed on RRIF withdrawal, and then taxed on growth of left over funds withdrawn).

Evidently the Student Loan and Bursary amounts may increase, given parents’ income will not be as big a factor for students? This may help me a little, but I am skeptical, until I see the results. I am getting a lot of my info from my daughter, who keeps sending me updates (yes she is still at school).

The Ontario Government announced their budget on Thursday, with little new spending, and a pledge to have a balanced budget. The balancing will be done by freezing spending, and hoping for $10B increase in tax revenue? Maybe they need to do a bit of job creation, to make sure those taxes will increase? At least it is not the typical trick that Dalton McGinty used to pull (i.e. a nasty cutting budget in the first year of a term and anything that would be unpopular, and then nicer budgets later in the term).

Get $50 in free trades.
 

My Writings for Week Ending April 24th

With the Senators making it to Friday, we shall see whether the clock strikes midnight on this Cinderella story (and cause Mark from My Own Advisor, to be very unhappy):

Click here for many more great articles

{ 5 comments }

How to Find the Right Tax Preparer

As the tax deadline looms on the horizon, I felt folks might need a few helpful hints on how to choose the right tax preparer for you, or maybe more accurately, which tax preparers not to choose (especially if you are in a rush, the wrong decision here could end up being quite costly for you).

Laughing Accountant

An Accountant with a Sense of Humor?
Image courtesy of iosphere at FreeDigitalPhotos.net

If your prospective tax preparer has any of the following problems or character flaws, don’t choose them to prepare your taxes:

  • If they say that they are not very good with numbers, but that doesn’t matter much with taxes, run away from them very quickly
  • Should they mention in passing that it was nice of you to drop by, as they just got out of prison for fraud, you might not want to choose them to prepare your taxes, unless they are a relative. In that case invoke the, “I don’t do business with family”, clause.
  • If they ask you, “Now when is the tax filing deadline this year?”, you might want to rethink hiring them, for your tax preparation needs.
  • If the firm is called H&P Block that might be a dead giveaway they are trying to snare unsuspecting clients, assuming they are getting H&R Block.
  • If their motto is, “Only 1/2 our clients get audit’ed, and we were out of town when that happened“, that shouldn’t give you a lot of confidence in their skills.
  • A laughing accountant always worries me too, but that might just be my own experience going to school with future accountants.
  • If Canadian Tire started offering Tax Preparation services while I waited for my oil change, while convenient, I would avoid that service as well.
  • If they offer you an “Instant Cashback“, doesn’t that make you wonder how much more of a tax rebate they may have found for you? If you need your tax rebate that fast, you may have bigger problems than you think (financially).

Just a few helpful hints on who to avoid as your tax preparer for this year.

{ 0 comments }

Budget 2015 What’s In It For Me ?

When I say, what is in it for me (the Federal Budget for 2015), I mean ME, the BCM, since you should really read it yourself and figure out what is good (and bad) for you.

What are the things that I (the Big Cajun Man) dislike about this budget? I am not fond of the “sleight of hand” accounting that is going on to claim the “balanced budget”, I am not that worried about it being balanced, and having odd pay outs on programs (and cutting programs without necessarily mentioning it), smacks of “Nortel-ian” accounting practices.

Budget Cuts

Budget Cuts

Image courtesy of nokhoog_buchachon at FreeDigitalPhotos.net

I’d also like to have all taxes abolished, if you were asking, but given that is not likely to happen in my lifetime, I guess I should get on to the things that I do like about this budget:

  • The TFSA limit is officially doubled to $10,000, I like that, even though I am middle class, and can’t use all this savings room just yet. I am concerned that the Liberals are already threatening to roll this back to $5000, never a good idea to take things away from folks in programs.
  • The “Family tax credit” for families like mine, where I can income share with my spouse is now officially in the budget (although I already have it for the last fiscal year). Wonder whether the Liberals or NDP will try to cut that as well, again, never good form taking money out of folks pockets. The UCCB is nice as well.
  • I am kind of baffled/curious about this statement:

    Making the Canada Student Loans Program work for families by reducing the expected parental contribution under the needs assessment process.

    What does this mean? I don’t know but it sure sounds nice.

  • Reducing EI premiums is nice, as it is a tax, no matter how you define it.
  • Another useful idea, that I think I like is:

    Extending Employment Insurance Compassionate Care Benefits from six weeks to six months to better support Canadians caring for gravely ill family members.

  • Seniors now have a less aggressive withdrawal schedule from their RRIFs as well, seeing as I will be thinking about that soon, I like it.
  • Another useful credit for folks with disabled family members, or seniors who need to add things to their house to make it a bit safer for them

    Introducing a new Home Accessibility Tax Credit for seniors and persons with disabilities to help with the costs of ensuring their homes remain safe, secure and accessible.

  • Another interesting and somewhat non-commital statement is:

    Launching a National Strategy to support improved financial literacy.

    but I suspect that means they won’t be giving me a subsidy for this site :-)

  • Some good ideas for veterans, but still not enough, for someone who you asked to go into harm’s way.
  • Another point near and dear to my heart, but again, the wording is a bit odd:

    $2.0 million in 2015–16 to support stakeholder consultations on a Canadian Autism Partnership.

    I am not sure whom they will be consulting with.

There are a bunch of other measures, that you should read about, to see how it affects you. You could read the Tweets about it, if you want a really short version of the important stuff.

{ 2 comments }

Expensive Food in Canada in March

Our friends from Stats Canada say that our basket of goods that makes up the Consumer Price Index went up only 1.2% year over year (with the year ending March 2015), which sounds just fine, but (as we know) the devil is in the details of these numbers, isn’t it?

The numbers sound lovely, except if you throw gasoline out of the equation and then your numbers change by increasing by a full 1 % (i.e. 2.2%).

CPI with and without Gasoline

CPI with and without Gasoline over the past little while

Given that gasoline had a 19.2% price drop (year over year) there must have been something else that went up a lot to keep the CPI going up the way it is. Any guesses as to what was the big nasty price increase? Booze and smokes (naturally) however, a close 2nd place is food which is up 4.2% (year over year), but looking closer, Meat is up 11%, so the meat eaters of Canada are taking it right in the wallet.

A quick glance at how “all over the place” prices are over the past 12 months:

Prices by Category

Price increases by category (past 12 months), compared with February

Luckily in Ontario booze prices are going to go up with the new Beer Tax proposed as well, yea! I suppose they could impose a Sirloin tax, but let’s hope they don’t think that far out of the box.

Bank of Canada’s core index

To help out with the confusing arithmetic, we have a different index for the Bank of Canada’s view, and remember their “sweet spot” for Inflation is 2.0%, and the past two months, their index has been over that, so are interest rate increases coming some time this year? Here is what Stats Canada said:

The Bank of Canada’s core index increased 2.4% in the 12 months to March, after rising 2.1% in February.

The seasonally adjusted core index rose 0.4% on a monthly basis in March, following a 0.1% increase in February.

However, the Bank of Canada already commented in this area, on Wednesday, and their statement about keeping their key overnight rate steady was:

Risks to the outlook for inflation are now roughly balanced and risks to financial stability appear to be evolving as expected. The Bank judges that the current degree of monetary policy stimulus remains appropriate and therefore is maintaining the target for the overnight rate at 3/4 per cent.

This was after they explained that the Canadian economy was “stalled” in the first quarter of 2015, so it seems the economy continues to be addicted to stimulants.

{ 2 comments }

Playoffs, Tax Time, Beer tax and #BestMoneyStories

The Hockey playoffs have begun and the NBA playoffs begin tomorrow, and there is an F1 race this weekend as well, sounds like a good weekend to me. Will the Sens be able to come back from their first game defeat? Who knows, but it will be fun to watch, no matter what.

Crocus

Springtime in Ottawa

April 30th is not that far away, have you got your taxes in yet? I have my refund already, but I must remember to sign up for direct deposit, as we also remember that Government Cheques are going away. Do a good job on your taxes, make sure you get all the deductions and credits you are allowed, and then, go to your employer and fill in a T1213 form (if you can use those credits in the coming year), so that you get paid the maximum you can, and stop loaning money to the government.

More interesting revelations coming out of the Duffy Trial this week (speaking of Senators), alleged contract shuffling and alleged payments offered to volunteers? Goodness the wacky things that go on in Ottawa. Where do I sign up for one of those paid volunteer jobs?

In Ontario, we will finally be able to buy beer in grocery stores, but for the right to do this, there will also be a new Beer Tax ? Ontario the good strikes again, and only 450 stores will get “permits” to sell beer? And a new tax on beer? Ms. Wynne allow me to add my voice to the folks asking #WTF? Remember there is a new budget coming on April 23rd too (Ontario Provincial that is).

Spring has sprung in Ottawa, and it is about bloody time!

Get $50 in free trades.

My Writings for Week Ending April 17th

Spring has sprung in Ottawa, and we even have crocii sprouting in the gardens, a nice change from February:

Click here for many more great financial stories

{ 3 comments }