Canadian Personal Finance Blog

Personal Finances and Consumer Concerns, essays, stories, examples and how to articles with a distinctly Canadian Point of View

Archive for the ‘Income Tax’ Category

How do You do your Taxes?

Thursday, March 4th, 2010


As you can tell, I use QuickTax to do my tax returns and those of my direct family. I find it a useful tool, but my bet is other software solutions might work just as well, but I am comfortable with this tool, so I keep using it (I am a creature of habit).

Typically I do my taxes over about a 1.5 month period, while the various tax receipts and such arrive at my house. Typically the methodology followed would be something like:

  • Buy Quicktax (although this year I could have had it for free, darn!)
  • Update Quicktax (this is iterative, because there seems to be new updates every week, and then as tax season comes near an end there seems to be an update every day or so)
  • Create this year’s tax returns for my family, based on last year’s Quicktax files, this manages to bring forward a lot of useful info like personal info, and also Rrsp limits and such, so I don’t have to reference last year’s returns from the CRA, just run the utility and start from there
  • Go into Quicken and glean out whatever information I think I can get, and do a rough estimate of what my taxes might be. Inevitably I overestimate how much tax I have paid and I start getting delusions of large tax refunds, but that is soon remedied. Quicktax does have an import from Quicken tool, however, every time I use it, it really screws up a lot of things, because I don’t have my Quicken set up correctly, so I typically do this by hand.
  • With this estimate I will see if there is a need to buy RRSP’s to lower tax owed, which usually is not the case
  • As each receipt and/or T-4 or such arrives I then type it into Quicktax and watch my estimate become a closer to reality number
  • Over this time I will remember things I have forgotten to input like the cost of my safety deposit box, or my kids bus passes, and I will add them with glee seeing my refund number inflate.
  • By the time the first week of March rolls around my return is 95% complete and factual (i.e. not based on estimates), and I can start thinking about E-Filing my return, however, this year I printed out my return first to have a look at it, and found a few “oddities” that I am not sure where they came from, so now I am chasing them down to find out why.
  • Finally I have to decide whether I feel confident enough to submit my returns via E-File, it usually happens on a Sunday morning, when I get a sudden burst of enthusiasm and it all gets done. One year there was a problem with my data that I had to follow up with the CRA (it actually stopped me from E-filing), but hopefully this year will not be one of those years.

With that, I await to see whether I forgot something (inevitably a receipt will appear near the end of March, which I have forgotten about), or whether I made an incorrect assumption, when the CRA sends me their response to my submission. Most years it has been spot on, which makes me very happy.

Anybody else do their taxes this way? Did I miss something?

QuickTax Software Give-away Time

Saturday, February 20th, 2010

It is time for the first major give-away on this site (ever).

Intuit was kind enough to contact me and send me 2 copies of  QuickTax Standard, which I will gladly give away (since I already bought a copy for myself before they sent me these (yes, irony is a good friend of mine)).

Legalities: Please note, I do use Quicktax (and Quicken) but the copies I have I paid for with my own money (more fool me), I think these are useful tools, but I am not being directly paid to run this give-away (in fact I am out of pocket because I have to ship it to you).  I do run advertising for Intuit to sell Quicktax, as you have seen over the past few weeks, but this give-away is not connected to those ads.

How can you win one of these free copies? Well, let’s first start out with some of the ground rules:

Free Software

Ground Rules

  1. I assume  you are a regular reader of this blog, so all you need to do is leave a comment on this post with your e-mail address to enter (no mailing address needed yet, just an e-mail).
  2. Given this software is for Canadian Taxes, you should really be a Canadian, or have a use for it (don’t just enter so that you can re-sell it on E-bay that is just scummy).
  3. Your comment needs to have a good reason why you want this software (if you say you are having problems with the CRA and are thinking about going for a short airplane trip, you are disqualified), yes, I want it is a valid reason, but so dull. Also remember I have ANTI-SPAM filters on my comments, so if your comment looks like SPAM it might not get entered (or if you are a SPAMMER!).
  4. If you subscribe to my feed, you will have my undying respect and your Karmic mojo will increase 3 fold (no, you don’t get another entry, but I figured I’d beg).
  5. Feel free to TWEET this (remember I am on twitter as the BigCajunMan (see the button below), and if I see you tweet this, I will add another entry in for you).
  6. I hope shipping this isn’t too expensive (no it is not going to go Fed Ex or overnight, it will go via Canada Post).
  7. If you are associated with Intuit or are married/related to me, you are not eligible to enter.

Follow bigcajunman on Twitter

Contest will close on Tuesday February 23rd at Midnight.

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I Spent How Much Last Week

Tuesday, February 9th, 2010

Quicken is a useful tool for me, to track my family’s spending habits, but last week was an interesting week for me.

I started working full time in 1986, so some might say more than a generation ago (depending on how you count), and when I was first hired, I was paid a reasonable wage (not an exorbitant one, but reasonable). My wife and I lived on this income in a reasonable apartment, and we lived a frugal but reasonable life.

Flashback to last week, where in two purchases I eclipsed my yearly gross income for 1988 (2 years after I had started working full time). What did I buy? A house? A yacht? Nope, our orgy of spending was on:

  • A used Toyota Sienna (stop snickering, it doesn’t have the accelerator pedal issue (at least not yet)).
  • A knee brace for my daughter who has damaged both her MCL and ACL

That’s it, yes a fairly big expenditure, but remember this is more than I made gross (before the CRA got a hold of a lot of my income). The knee brace is actually about the price of 3 months rent from back then, but it is a necessary purchase (and I will be reimbursed (I hope) in some way from my health plan).

Other interesting factoids from these purchases:

  • The van cost about 43% less than our last van which we purchased new (and paid off, with 0% financing over 5 l-o-n-g years).
  • We were offered “financing” from Toyota of 6.5% annually, I pointed out that my bank would give me a rate of nearly half that, they didn’t seem to care.
  • The purchase was not financed, and if I assume a 4.0% financing rate I have saved in the neighbourhood of about $4000 in interest charges (assuming a pay back over 4 years or so).
  • The knee brace comes in many interesting colours and styles (colour styles), including: Snakeskin, Butterflies and Star Spangled Banner. My daughter chose metallic black (I think Black is the new Black this year).
  • Didn’t get any car matts from Toyota, but given the recall issues about the placement of their car matts, maybe it’s a good thing I bought some replacement matts at Canadian Tire
  • Believe we got a full tank of gas with the Van (given gas prices that’s about $100 added in)
  • Got a reasonable trade in for the my GM Montana (that had a distinct odour of Anti-Freeze), so no complaints there
  • Toyota spelled backwards is Atoyot, surprised there isn’t a car called that now.
  • Knee Braces should never be worn backwards, or your knee will end up bending like an Ostrich’s knee, which is bad.
  • Certified cheques cost more to get from my bank, than a bank draft, so I saved $2.50 by getting a bank draft.
  • What is undercoating for, and why does it cost so darn much?

Lots of interesting factoids (where factoid means things interesting to me, and most likely me alone).



Choose Your QuickTax for the 2009 Tax Year

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Summer Reprise: I Should Divorce My Wife?

Wednesday, August 5th, 2009

Given it is a busy summer (OK a lazy summer) here is another chestnut from my early writings (2005) interesting points made, not sure I completely agree with it now, but it is still an interesting read (in my early writings I seem to rant about things, which is fun to read sometimes too).

I Should Divorce My Wife?

I read that one on the Alan Baggett news site, and scratched my head but it is actually how the tax system is set up currently. If I divorce my wife and pay her Alimony (not child support, remember that case a while back, where that is taxed in the payers hands) I can effectively split my income.

I remember having this argument that in the Government’s eyes the following scenario would be ideal:

  1. Divorce my wife, and pay her half my salary as Alimony (thus sharing my income)
  2. Have my children live with me, so I might be able to claim the Child Tax Credit and Ontario Tax Credit
  3. Rent my wife an apartment in the basement of my house (with it’s own entrance).
  4. Have my wife take care of the kids (as daycare) and write off the money I pay her on my income as well (and she does it in my home, so I write that off too).

OK, ok, this is a ridiculous scenario (and I’m sure some might even claim illegal, although I’d love to see that taken to court), but this is how SCREWED UP the entire Canadian Tax System is! I checked this with Quicktax and it was quite happy to show me the obscene amount of tax I’d save.

Alan’s tax writings are an interesting read, as are his stories (they are a little “he said, she said” which at times I am not fond of), but still interesting to read how some people are persecuted by the Tax system, while others get off “scott free”.

Please let me repeat, I do not condone the above tax sharing concept (but if you get away with it drop me a line, I’d be curious to hear).

Write it down!

Monday, June 22nd, 2009

I have written previously about if it’s not written down, how do you know it happened (a phrase I stole from Tom Clancy), and last week I wrote about financial plans (and revisiting them mid-year), and that is another good example of something you should write down somewhere. Simply thinking up a financial plan but not writing it down, or building a spreadsheet to monitor it (or some tool like that), how can you tell if you are succeeding or not?

Without writing down your goals and your plans, your mind can play tricks on you, or worse you can forget important goals that you need to achieve to reach Financial Nirvana (as it were)? You don’t need to be journaling or anything like that but simply creating a simple document with your goals written down may be enough for you to keep those goals in mind over the year. It’s not very hard, and a very useful way to keep yourself focused and also a way to keep yourself motivated.

Examples of things you should write down:

  • Your financial plan, and goals for the year and maybe for your life
  • Every cheque you write, as well as every monthly withdrawal from your bank account
  • If you don’t know where all your money goes, write down for a week every time you spend money and then at the end of the week look and see where you spend your money.
  • Use a calendar to remind you about when bills are due, monthly payments, birthdays, and anniversaries too (maybe reminders before those last two about when to buy presents)
  • Many, many other things, that you think you might forget financially!

Nortel Sells The Ca$h Cow

Nortel announced the sale of their wireless division on the weekend for $650M which is a good thing for the folks left at Nortel, a good thing for Nokia/Siemens but not sure if it is good for Nortel creditors or pensioners (remains to be seen).  For the longest time the wireless group was the engine that drove Nortel sales and revenues, so to see it sold for such a discount, it is sad, but hopefully it means the remaining survivors at Nortel can keep their jobs.

Good Luck Toronto

As I write this the City of Toronto is poised to be crippled by a Garbage strike, I can’t recall any garbage strikes I have lived through, although I have seen video of the garbage strike in London England in the mid-70’s, and I was very impressed by how much garbage a big city can accumulate in a very short period of time (and the mess it can create). Striking during an economic apocalypse is a gutsy play, but then again Refuse Collection is one of those jobs that not many folks would do either, so we shall see. Might be time for Torontonians to look into cholera shots?

Belated Happy Father’s Day

For the Fathers out there hope you enjoyed your day, traditionally the day when the most collect phone calls are made, sort of sums up being a Dad, doesn’t it?

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