Canadian Personal Finance Blog

Archive for the ‘Safety Deposit Box’ Category

April 30th (Canadian Income Tax deadline (CRA)) is starting to loom on the event horizon and for me that means paying a hefty 5 figure Income Tax bill (due to my severance payment not being taxed at the correct level). This will (hopefully) be the largest tax over-payment I need to make in my life (but who knows).  

Since I owe the government money I have filed my tax return, but I am waiting to make my payment until the end of the month (no point in giving the government any extra funds), which I will do using my Bank’s Direct Bill Payment capability.

Due to this very large bill, I have managed to find and work as many deduction and tax credit areas as I can legally think of (aside from claiming my cats as dependants, which is in the illegal side of the equation).

Some of the more important areas that I was able to take advantage of:

1. Soaking up all remaining RRSP room that I had to lower my tax payment (along with the allowance given to me for having worked for the same company between ‘85 and ‘94).
2. Ensuring I transfer over my daughter’s tuition fee deduction (she did not need it).
3. Mass transit tax credit, using the bus passes I buy my daughters to lower my taxes
4. Active Children tax credit, for two of my daughters
5. Safety Deposit box rental as a carrying charge
6. Making sure I have all of my Charitable Donations in place
7. Filling in my tax forms correctly, thanks to Quicktax (I am sure UFile would have done the same)

These and other important tax deductions and credits have helped soften a large blow to someone with no income for now either.

However, as all of these stories go, there are people worse off than I am:

1. Former co-workers who got no severance, so I am not complaining about paying a lot of tax, because it means I did get some money.
2. Other folks due to circumstance who are going to owe much more than me (see Michael James post on Phantom Income Strikes). 

Remember when you pay that big tax bill there are others worse off, so calm down and get it done, April 30th is not that far away!

Child Tax Fitness Credit

Here is one to remember for those of us who either live in Hockey Arenas or Gymnasiums (or soccer fields) most of our days. The Child Fitness Tax Credit allows you to claim up to $500 per year for each child under 16 who is in an accredited fitness program (read the rules and regulations carefully here, evidently there already have been folks claiming that have been told their claim is incorrect).

One important point for me this year is the statement (taken from the web site):

The children’s fitness tax credit lets parents claim up to $500 per year for eligible fitness expenses paid for each child who is under 16 years of age at the beginning of the year in which the expenses are paid.

Since one of my daughters did turn 16 last year but AFTER January 1st, I can still claim her fitness credit for one more year (and that is nothing to ignore). I thought I had lost this for my daughter, but after careful checking of the web site, I am still good for one more year.

For most of us gifted with kids who are on teams, $500 is really only the start of expenses for a lot of sports, but it is not to be ignored either. 

Carrying Charges (aka Safety Deposit Box)

This is one I always almost forget, for those of you who like Paper and Pen methods, this is for line 221 of your return Carrying Charges and Interest Expenses .  The web page says:

Fees to manage or take care of your investments (other than administration fees you paid for your registered retirement savings plan or registered retirement income fund),including safety deposit box charges,

There it is in black and white, so make sure you claim it. What if you have a home safe? I have no idea where that might fit in this, but I do know that Safety Deposit boxes are covered. Anyone care to comment on whether they have claimed a home safe for this same deduction?

Security of your financial information is essential, for many reasons. Identity theft is the main issue, in that if someone can get enough information to re-create your identity in some fashion and get credit cards (or worse) in your name, it will create huge issues for you.

Fraud is rampant in our society, and you must be diligent to ensure you are not a victim of this crime.

Paper Security?

The Shredder , as we spoke about on Tuesday is your security weapon for your printed records. Any old financial records must be destroyed (after they are no longer needed, please don’t just destroy records without knowing whether you need them any more), or stored in a safe place until they are no longer needed. The safest place I can think of for saving important financial documents would be either a Safety Deposit Box or a home safe (or strong box). This will secure your printed information.

What kind of information?

1. Old Tax Forms, with receipts and associated responses from the government
2. An inventory of your house with it’s estimated value (don’t store that in the house)
3. Wills
4. Birth certificates and such
5. Receipts from Credit Cards, Property Tax Payments, and such (I think the rule of thumb is at least 3 years of that data).

Computer Security

Damn right you need computer security .

Possible Computer Security Attacks

First whatever computer you are running your Financial Software tools on, must be secured with a password of some kind, that is common sense.

Next if the computer is connected to the Internet (which it most likely is), then it must also have Anti-Virus and Anti-Spy Software, or your data can be corrupted, or worse still your machine can be compromised by:

• Trojan Horse software that simply replaces parts of your system with it’s own versions which will look for information on your computer.
• Key Capture software that will simply steal your on line banking password, by logging all the keystrokes you type on your system and sending them to another computer

Yup, this can happen to you, and you need to protect your finances from this kind of attack. There are many others, I am just highlighting the major ones here (there are many, many more attacks out there).

Network Security

If someone can break into your home network, they can get onto your home computers and steal information directly from your system. There are some easy fixes to stop this (or at least slow it down).

If you have a home network and have a home router, please change the password on the router from the factory default and turn off remote administration! You may as well leave your front door open if you have this turned on, and I can’t tell you how many configurations I have run into that are set up this way.

Linksys, has changed their default configuration to FORCE people to change the default password, but on older routers, this is not the case. If you have a router and don’t know what I am talking about, you need to get someone in to set up your network security.

If you have a wireless home network, TURN ON WAP or some other wireless security, and turn off SSID broadcast. Look up War Driving and see what can happen to unsecured wireless home network configurations.

I had an old router who’s security was compromised, and I ended up selling Herbal Viagra for a while (I didn’t make any money on the deal, and I had my Internet access turned off for a week, and only got it back because I plead stupidity about how I had not configured security on my system).

Again, I am only highlighting a few areas, if you aren’t sure, consult the Internet or call someone who knows about this kind of stuff, don’t just hope it doesn’t happen to you.

Disposal

Inevitably you will want to dispose of either the backup media you have been using for your computer, or even the computer itself and this is where many people’s identities get stolen (if it can happen to F1 Driver Lewis Hamilton, it can happen to you too).

1. If you have old floppies around the house and you do not know what is on them, run a powerful magnet over them, or destroy them (with a hammer).
2. If you have been doing backups on to CD’s or DVD’s and you do not need these backups any more, destroy the media (my shredder actually chews up CD’s and DVD’s, so that is where they go).
3. If you have tape media, cut it up, burn it, whatever.

This media if just thrown out, is insecure and can easily be used to get information about you (especially if they have been used to back up your financial data).

The one computer point people don’t think of is disposal of your computer. Your computer has a hard drive in it, if you simply throw the computer out, the hard disk has all of that information on it about your finances, and whoever picks up the computer now has this information.

The best thing to do with an old computer is the following, remove the hard drive from the system, and physically destroy it. Either take it apart and smash the platters, go at it with a sledge hammer or something of the like.

If you want to give this computer to someone or donate it, you must find a shop that will WIPE the disk clean or buy software that will do that. This software will overwrite the data on the disks over and over with varying patterns until the only people who might be able to read it is the CIA or CSIS, you can then donate your computer (but I won’t, I will destroy the hard drive by hand, I don’t trust any of this stuff).

Never, ever give a computer away with the hard disk intact, if you have used it for any financial work at all. Even if all you did was order some stuff from E-bay on line, wipe it clean.

Am I Being Paranoid?

You are only paranoid if everyone is not out to get you (hey I am now the Big Paranoid Cajun Man), but seriously, securing your financial data both hard copy and soft copies and the associated software is the most important thing you can do for yourself, and your family.

After chatting with a parent at a basketball yesterday it struck me that there might be some folk who do not fully understand all of the tax deductions and features that are available to them, so here I give you a list (not exhaustive) of some of the deductions you should think about.

Children’s Fitness Tax Credit

This is the new one that a lot of folks may not remember this year. Up to $500.00 worth of fees that show your child in an athletic endeavour are deductible. The title of this section is a link explaining much more about this tax credit, that parents should take advantage of. Important to have a receipt for this.

Nope, if Johnny played the violin last year, that is not covered.

Other deductions?

Some other deductions you might want to think about if you are eligible for them:

• Don’t forget daycare costs, if you both work you should claim those costs, and remember important things like summer camp also can be included in there as well. I cannot claim these as my wife’s income is insufficient to take advantage of these.
• Safety deposit box, yup that is a carrying charge, that you can claim as a deduction on your taxes.
• GST sales tax credit? You never know when that might kick in. My daughter got that last year for the first time, so that one is kind of cool.

Any other interesting tax credits that folks have run into, please comment on this.