Taxes: You are now officially LATE!

Let me be a little more exact, if you OWE money to the government today (May 1) you are now officially late! You don’t actually have to send in your tax return until June 15th (midnight), however, if you owed money, you had better have sent them some money by now, or you are now in arrears.

You could have made an arrangement with the CRA, if you owed money (according to their web page):

If you can’t pay the full amount of tax you owe, you may be able to make a payment arrangement. If the CRA agrees that you are not able to make a full payment, an agent can work with you to develop a plan to help you pay your taxes.

So you had a chance, if you had called the CRA, and if you haven’t sent money yet, I would call the CRA anyhow, and see what you can do about it. Don’t do nothing, that is going to get you into more trouble, better to throw yourself on the mercy of the CRA now, than wait for them to come and get you!

If you are late, what kind of penalties might you get? Check here for the complete details, however:

If you owe tax for 2011 and do not file your return for 2011 on time, we will charge you alate-filing penalty. The penalty is 5% of your 2011 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months.

Yikes! Hope you paid on time (if you owed money). Oh, and you may be able to get these penalties waived if you can give the CRA a good excuse (an excuse that they agree is an extenuating circumstance). Keep that in mind too.

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CEOs Salaries, are they worth it?


The CCPA (Canadian Centre for Policy Alternatives) put out a fun graphic on their site yesterday which has really caught the fancy of the Media in Canada. The graphic is an updating graphic showing the Clash for Cash: CEO vs. Average Joe which gives you an idea how much some of the top 100 CEOs in Canada make in compensation.

This kind of tool is always useful to show folks just how much is spent on the top end of the management tree in many of Canada’s largest companies. The actual numbers suggest that a CEO makes about 189 times what an average employee makes in a year (but the graphic is just so much more fun to look at).

The question does arise from this simple ratio, are the CEOs of Canada’s Elite 100 companies really worth the $8.38 Million (on average) that they make every year? I have no idea, but my opinion is that the reason these folks make what they make, is that they have convinced someone they are worth that, and thus they get that kind of compensation. Is this fair? Fair doesn’t really come into it, if the company is successful, then the CEO has earned their pay, and if they don’t they are fired, that should be the way it works (although in some cases like Nortel you had to wonder what was going on).

The mainstream media seems fixated on pointing out the 1% that make so much money and such, but I’d like to point out that there are a couple of Hockey players earning that much, a few more NFL Football players, even more Basketball Players, and pretty much every baseball player that earn that kind of compensation as well. Is that fair? Some billionaire is willing to make a Multi-Millionaire out of someone who is talented at their job, that is just what happens in this world.

Do I like all of this? Hell no, I’d love to make that kind of money myself, but if I did, just think how much folks who were more talented might make?

I do still like the graphic as well:

CEO Income, REAL BIG

If you go to the link (click on the picture) you’ll see it being updated (which makes it that much more depressing).

 

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What to Do With Your Tax Refund?

Let’s Go Crazy!

I am assuming that you will be receiving a tax refund this year (if you are not keep reading maybe you can get some ideas for next year). I have been reading a bunch of posts from various financial bloggers about what are the worst things to do with your tax refunds, and I must admit I have been berating folks about mis-spending money lately as well ,so let me first preface this post the only serious misgivings I would have with your Tax Refund would be:

  1. You shouldn’t really have one, next year try to owe nothing, that way you already had the money to enjoy
  2. You take your refund money and do something illegal with it, or worse you do something that puts you farther into debt
  3. You get a quick refund from some place like Money Bamboozlers (or whatever)

With point (2) I mean using your refund as a down payment on a car or have it pay for only a small part of a ludicrously expensive vacation!  As for point (3), you know my opinion of the Pay Day Loan world and I lump the “quick rebate” firms in there too.

Don’t Go Crazy!

Now that you have this tidy pile of cash, what can you do with it?

Money, Coins, Pennies

Money, Money, Money!!!!

  • You could use it on some of the projects on your Honkin Big Summer To Do List, or better still hire someone to do some of the things you want done.
  • Repair the brakes on your car (no you shouldn’t be waiting for a rebate cheque if you are driving the car).
  • Invest it in an RRSP or your TFSA? That is a good idea, and if you put it in your RRSP, you are setting up for another rebate next year (or you could lower your taxes at the source as well, if you fill in the right forms, and get a receipt right away).
  • Pay down debt, is (in my opinion) the best choice, since that is an excellent way to get rid of debt (use found money to pay down debt). If you have debt, think about using this wind fall to get you out of the debt trap.

What are you planning to do with your tax rebate, or were you smart enough to not owe anything, or be owed anything?

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You Can Call the CRA for Tax Questions

It just might take a while, but be patient.

Lots of folks are calling the CRA right now for many different reasons, and I still have a few questions I’d like to clarify before I file my family taxes. It is important to be sure you are taking the correct deductions and credits, before you file, so it is not a sign of weakness or feeble mindedness if you call the CRA (don’t be proud).

My patient comment comes from the fact that I called 4 times and got a busy signal (which is really bad form in the Help Line business, but we’ll forgive them that), I got through on my 5th call and then only had to wait 8 minutes until  I actually spoke to someone (I was expecting a much longer wait).

Have One Question

I have found that if you call the CRA or other help lines, you really should have 1 well thought out question. If you have many questions, maybe you should call a few times? I don’t know, but as soon as I ask more than 1 question I find the system seems to bog down or break, so I keep it to a single carefully worded question.

My question was about the fact that my daughter is attending an out of province University (we are in Ontario she is going to school in Nova Scotia), and the tax form  (and the Turbotax help page) says that the tuition may or may not be dealt with in a different way, so you should call the CRA help line, hence why I called.

Out of Province Tuition

My question was not too hard, and because the University she attends is an accredited institution,(but the answer is not written down anywhere, you need to call to make sure the school is OK with the CRA) so she can claim her tuition, and thus transfer a portion of it to me.

The young lady I spoke to was very helpful, and gave me the web page that she looked at and such, and she asked me if I had any more questions, and I answered NO. This does not mean I don’t have other questions, I am only going to ask one question this time, but I may call back.

All in all an OK experience this time, however, I am not sure how my future experiences will go.

Anybody else have any experiences with the CRA helpline?

Lenten Challenge Coming

Watch for my Lenten Challenge on Wednesday, I am still formulating a few things about it, but I hope it turns out to be a fun challenge for folks.

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Medical Expenses and Taxes

Remember that if you have enough Medical Expenses it might be worth mentioning them on your Federal Tax returns.

Last year was a bigger year for medical expenses for me because of the following:

  • One of my daughters ruptured her ACL, and there was a fair amount of expenses there, including a brace and physio therapy.
  • I needed physio therapy for my knee, due to me getting old
  • My other daughter also had physio
  • Some visits to Psychologist for testing for my kids
  • Occupational Therapy for another kid

Now a great deal of this was covered under my health plan, but only up to 80% of the expense, and there was a limit to how much was paid for the year.

All of this adds up to over $7000 in expenses, but I must also then put in how much compensation I received from my Health insurance as well. It may add up to nothing, but it is something to think about.

How  was I able to know this? I checked on my Quicken, of course (sorry for the blatant plug, but it is actually the case in this instance). I put it all into my TurboTax and it was easy enough to put it all in too (another blatant plug, but stay tuned there will be a giveaway coming too).

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