HomeMy WebLinkAboutThe Citizen, 2009-02-05, Page 11THE CITIZEN, THURSDAY, FEBRUARY 5, 2009. PAGE 11.
(NC) Uncertain economy.
Layoffs. Volatile markets. Do you
need a vacation to get away from the
bad news? You may feel like you
need a break from it all but are
worried about spending the money
this year.
Vacationing and taking time to
unwind can help alleviate stress and
increase your productivity at
work.
1. Decide what will make you
happy. Are you only content on a
luxury Caribbean cruise or will
more modest travel plans work
for you? Maybe this year you
could rent an apartment
near the beach and mix your
own margaritas instead of
heading to the all-inclusive
resort.
Think about the type of vacation
that will make you happy and then
determine how much money
you will require for
accommodations, transportation and
food. Create a spreadsheet to outline
costs.
2. Create a vacation fund with
a Tax-Free Savings Account
(TFSA). A TFSA is a new flexible
investment account that allows you
to earn investment income without
paying taxes and gives you access to
your money whenever you want it.
You can contribute up to $5,000 a
year and it is a great way to save for
a vacation.
In addition, any withdrawals are
added to the following year’s
contribution room allowing you to
save for future vacations.
3. Prepay your vacation.Start
making weekly or monthly
contributions to your vacation
fund so that you can return
from your trip without a huge
credit card bill. It can be as easy as
bringing your lunch to work
each day, instead of buying it, and
putting those savings into
your “vacation fund” each
week. Small contributions
towards your vacation throughout
the year can easily add up t
o big savings in just a few
months.
4. Make a budget and stick to it.
Once you’ve determined your
final budget, try not to go over
your limit. Bring your
budget spreadsheet on your vacation
and inform your travelling
companions of the budget
parameters to make it easier to stick
to your plan.
(NC) Back in 1993, the average
Canadian would never have dreamed
of doing their banking or shopping
on the internet. Even a few years
ago, getting a date or reconnecting
with old friends on-line was
something reserved for the pocket-
protector crowd.
But things have changed, and the
internet is now the de facto resource
for almost everything, even doing
your taxes. Web-based tax software,
such as QuickTax Online, is gaining
popularity as an easy solution that
can be used to prepare and file taxes
on virtually any operating system
with a web browser. Great news for
Mac users, Linux fans and those
running other, less commonly used
operating systems.
Those who need to connect with
out-of-town dependents, such as a
child off at college or university, also
benefit greatly from on-line tax
software, especially since it
eliminates the burden of mailing tax
forms back and forth ahead of the
April deadline.
One user noted his personal reason
for switching to on-line tax software:
“My son uses the tax software to file
his taxes while at school, and when
he gets to a point where he needs
help, he shares his password with
me, and I just go in and fill out the
rest. It’s been a great solution even
though we’re 2,000 kms apart.”
Another big internet phenomenon
in recent years has been the growth
of on-line communities.
Today, everyone is communicating
on-line, whether it’s a quick note to
friends on Facebook, trolling
Craigslist for deals on a
snow blower, or posting a reply
on the Dachshund Owners
Group.
Now, that online community spirit
is even appearing in the unlikeliest
of places: tax preparation. Tax
forums are springing up all over the
web with people seeking and
offering advice on every type of tax-
related question.
QuickTax even offers a Live
Community section built right into
the software, where much of the
Q&A content is created by the users.
Canadians can connect and ask the
types of questions traditional FAQs
rarely address, such as “We took
custody of my wife’s son in April.
How do we claim this for the tax
year?” or “Which province do I
file under if I moved?” or “I
forgot to claim a charitable donation
last year, so can I claim this
year?” and thousands of other
situational questions that people
from coast to coast have
experienced.
“On-line communities give people
immediate access to information.
Often the quickest and most
compelling answers come from like-
minded Canadians,” said Chris
Davey, product marketing manager
for QuickTax. “The Live
Community gives taxpayers a way to
connect with each other, search a
database of questions people
have already asked, and get
answers to questions that
address their individual
needs.”
Tax-free savings account is launched
Getting away in tough times
(NC) This year, Canadians have
new options to help them save
money and keep a few more dollars
out of the tax man’s pocket.
The new Tax-Free Savings
Account lets Canadians deposit
$5,000 per year and earn tax-free
interest. It’s a great new way to save,
and works well in combination with
some more traditional options, such
as RRSPs.
According to Statistics Canada,
one-third of eligible Canadians
contribute to RRSPs. While many
might seek accountant advice
on how much to contribute, more
and more Canadians are using a
RRSP optimizer tool found in tax
software, such as QuickTax, to
calculate the best contribution
amount or to test a few what if?
contribution scenarios and pick the
one that delivers the maximum
return.
QuickTax software carries
forward data from last tax season
and includes any remaining RRSP
space when it calculates your
optimal contribution.
Given the current economic
climate, many Canadians might be
considering cutting back on their
contributions. But before making a
decision that can hurt your overall
income tax return, it’s important to
know there are other options, such as
borrowing to top up your RRSP and
paying down the loan with your tax
return. Just remember that interest
paid on these loans is not tax
deductible.
Another option is to transfer
“qualified investments” from an
investment to an RRSP account, and
receive a tax receipt for
the contribution. Keep in mind
that if your investment has
dropped in value below what you
paid for it, you can’t claim the loss
once it is transferred into an
RRSP.
Does your company match RRSP
contributions? If your company
offers this perk, don’t miss out on
this type of extra saving.
Once all is said and done and
you’ve filed your return, you want to
be sure you don’t get a knock on the
door from the tax man. Winning the
tax audit lottery is inconvenient,
even when all your decimal places
are where they should be, as it
means taking the time to collect a
year’s worth of tax records to have
them scrutinized.
Some tax prep services offer a
guarantee on their number
crunching, and now QuickTax users
can buy an Audit Defence option,
which goes beyond the usual
software calculation guarantees. It
essentially buys peace of mind:
should you be audited, you’ll be
represented by a tax professional
who will handle your dealings with
the CRA.
More information on how to get
the most from your RRSP
contribution is available on-line at
www.quicktax.com.
Web-based tax software takes off this AprilFinancial
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