By now, most people have received the slips required to proceed with preparing their individual tax returns. We know, the deadline for people who are not self-employed, to file their 2014 tax return is not until April 30, so why do today what can be put off until tomorrow? By figuring out whether you owe money or are owed money, you can plan accordingly. If you will be receiving a refund, file now because it takes less time for the Canada Revenue Agency to process returns than it does closer to the deadline date. You will also receive your refund more quickly. If you owe money, absolutely wait until the end of April to file. Just be aware that you could be assessed for penalties and interest for missing the filing deadline.
For 2014, there have been some changes to tax credits available for families with children.
Children’s Fitness Tax Credit
Families can claim up to $ 1,000 per child under 16 for activities that promote physical activity. These programs must be supervised, require significant physical activity and ongoing. Ongoing is defined as lasting at least 8 weeks or 5 consecutive days in the case of summer camps. The lowest tax rate of 15% is used to calculate the credit, so the maximum tax credit per child in 2014 is $ 150.
Children’s Art Tax Credit
This tax credit remains the same as last year. Parents can claim up to $ 500 per child under 16 for registration in eligible artistic, cultural, recreational or developmental activities. Full details can be found on the Canada Revenue Agency’s website.
Family Tax Credit
This controversial tax credit allows couples with children under 18 to split their income. Couples will be able to transfer up to $ 50,000 from one partner to another, which would allow that income to be taxed at a lower amount. This initiative benefits families earning the highest amounts of money at the expense of families earning lower amounts and in most need of tax cuts.
According to surveys, improving financial health is a top ten resolution, year after year. There are only two things that you can do to increase the amount of money that you have: increase your income; decrease your expenses. The first step is to calculate your household budget, a process which those of you with form aversion would prefer not to do. However, there are resources to help you with this. The Financial Consumer Agency of Canada provides both an online household budget calculator and a downloadable excel file (Scroll down to the end of the second paragraph to download the budget)
Because increasing your income (winning the lottery at some future date does not count) can be more difficult than decreasing expenses, the following outlines a few fairly painless ways to cut costs:
1. Reduce energy use. Hydro costs more at different times of the day and in different seasons. For the exact costs, see Toronto Hydro. Get into the habit of turning off lights and appliances when they’re not in use. Invest in LED light bulbs. They do cost more but the savings are considerable. Hydro One and Toronto Hydro distribute coupons to households. Clothes dryers use about six percent of a household’s energy, probably the highest use of all household appliances. Buy a retractable clothes line to hang in your laundry area or outside.
2. Eat out less. Restaurant food is expensive. Junk food is expensive. Make a menu for a few days and buy the ingredients that you need in one shopping trip. Look for recipes online that replicate your favourite restaurant meals.
3. Gas prices appear to be in free fall but the decline is relative. At the time of writing, a litre of gas is just under .90 cents compared to $ 1.26 this time last year. But take a look at this chart to see historical gas price fluctuations. Now is not the time to take out a bank loan in order to buy a gas guzzling vehicle. See Toronto Gas Prices for hints that can reduce your gasoline use and reduce expenses.
Although January is almost over, you can add one or two of the above to your resolution list and save some money this year. My 2015 resolution, after looking over the lack of blogs in 2014, is to write more and exercise regularly.