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May 8, 2014, 5:49 am

The Least Satisfactory Tax Return of my Life

by: The Financial Blogger    Category: Taxes


Last year, I decided to stop procrastinating with my tax return and completed everything in March. I was happily surprised to see how fast I got my tax refund back! I decided to do the same thing this year and I already cashed in my tax refund last week. Sometimes, the Government can be faster than you think!




The notice of assessment (NOA) is the document you get back from the Government confirming how much you earned, your tax credits and how much you have paid in taxes. If you paid too much tax during the year, you get a nice check along with your NOA. This usually happens if you can deduct an amount from your earned income or if you are eligible for specific tax credits. For example, I had deducted my RRSP contribution and I’m eligible for several tax credits because I have children.


My employer calculated the tax to be paid on a salary of X. Let’s say I make 100K/year and I should pay an average tax rate of 35%. This means I pay $35,000 in taxes throughout the year. Imagine I invest $10,000 in my RRSP and I’m eligible for a $2,000 tax credit for my children. My tax able income is reduced by $10,000 (the RRSP contribution) . This means I should pay 35% taxes on $90,000 and not $100,000. The total tax due is then $31,500 (35% of $90K). Then, I receive a tax credit of $2,000. The tax credit doesn’t reduce my taxable income, it reduces directly the amount of taxes due. My taxes for the year drop to $29,500. Since I’ve paid a total of $35,000  from my pay check, the Gov’t will give me back a nice check of $5,500. Wow… I wish my example was the real life! Hahaha!


On the other hand, if you have earned other sources of income throughout the year and haven’t paid taxes on them (investment income, rental income, second job, etc), you may end-up paying more taxes after filling your report.




I always look forward opening this letter from the government for two reasons: #1 I usually get a nice check. #2 This document confirms how much I earned last year. This always makes me proud and reminds me that I should appreciate having such a great job!


The NOA also tells you how much you can invest in your TFSA and your RRSP. This helps me plan my investments for the year.




In fact, I’m not disappointed by the amount but rather what I’m going to do with it. I deposited my checks last week and already used all my tax refund… to repay debts! As fast as it was deposited, it was applied to my loans just as fast. It wasn’t incredibly exciting to use my tax refund to pay down debt but I know it’s the right thing to do.


I’ve already paid for my vacation for the full year (including my summer vacation) so I know I will not have more expenses to come in the next 6 months. Reducing my debt is the #1 priority for the rest of the year and it starts with my tax refund.


The second step is to take my next raise to invest more in my TFSA to fund private school for my three children. Then, I should receive a part of my bonus this summer which will also be applied to my debts. By January 2015, I should have paid everything besides my car loan and mortgage, this will help a lot!


What are you going to do with your tax refund?


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October 18, 2010, 5:00 am

Your Take; Would You Pay For Your Neighbor?

by: The Financial Blogger    Category: Taxes

About 2 weeks ago, I wrote about how it is nice to live in Quebec. I saw that many of you think that we are paying way too much tax for what we get in return. Most people don’t see where their taxes go and believe it just feeds the beast. I must say that the administrative beast in Quebec is one of a kind! However, after a few years, I started to think differently; I am now ready to pay for my neighbor.

A right wing agrees with the left wing

Those who know me will probably say that I am a hard, right wing capitalist. I actually like the capitalism model and like the fact that it’s up to you to make your way through and earn a decent living. I am lucky enough to have parents that provided me with a good education and still think that I would manage my way through. And this is possible because we live in a capitalist country.

Maybe it’s because I am a father that my children have pierced my capitalist armored but I am now happy that I can support others with my taxes. Not all the time (I still get upset at people in their 20s who apply for welfare), but still, I think that we don’t have the same background and that everybody deserves a chance.

So even if I can afford all kinds of insurance if I didn’t have free healthcare or that I can afford to pay for my kids’ education, I am happy to participate in a system that offers them for free.

Are you stupid or what?

Yeah… some of you may think that I am stupid. That I should care about my family and our stuff and that I would have a lot more money in my pocket if it was that way. You are probably right. However, I know that some people including some in my family or circle of friends would have a hard time paying for everything with their own means.

It is not true that everybody can make a lot of money. Why? Not because they are stupid. Not because they are cowards or they don’t have enough  motivation. In fact, we all have special talents. We all have special skills. The problem in a capitalist model is that some skills are irrelevant to make money in 2010. Some people can’t really make money with their talent or by doing what they like. And to those people, I say: keep doing what you like, you live in a place where you can do it.

I always take my wife’s previous job for example. She loves kids. And kids love her. As she is really good with them (she was able to connect with an autistic kid when most educators never got near that level) and because she is fascinated by psychology and their development, she has decided to work in a day care. She was working full time, doing a tough job and being good at it. How much was she making? $25,000 after 7 years.  TWENTY FIVE… Do you really think that if she was going out with an educator they would be able to live a comfortable life without government support? I know some people do it, but it is a crazy life. This is why I don’t mind paying taxes (even though we are getting ripped compared to tax rates by country), because I believe that some people deserve to get more than what they pay in taxes.

What’s your take?

So, do you pay for your neighbor? Do you like it? Do you think that we should drop taxes in Quebec? What is your point about taxes and benefits?

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May 14, 2010, 4:34 am

4 Tax Refund Strategies

by: The Financial Blogger    Category: Taxes

In a very few weeks, I will open a wonderful brown letter with a wonderful document sent from my wonderful Government including… a wonderful Tax Refund!!! Receiving money from the government is always a lot of fun. However, you must have a tax refund strategy in place 😉

4 Tax Refund Strategies I Found:

#1 Spend all your tax refund!

Sounds stupid, egoist and irresponsible? Not if you have planned it this way 😉 My tax refund strategy this year is actually to spend it all. However, I have budgeted my tax refund from a while back. By contributing to the maximum limit of my RRSP, I was sure to get a huge tax refund. This is what I suggest to young people who wants to travel or treat themselves; setup a monthly investment contribution towards your RRSP in order to maximize your contribution each year and spend your tax refund on something you like. This will be your “reward” for making the sacrifice of building a good retirement saving nest.

#2 Invest your tax refund

If I wasn’t moving and if I hadn’t to buy a few pieces of furniture, I would definitely invest all my tax refund. This is a perfect timing this year as the stock market is a bit shaky because of our Greek friends overseas who are in the deep…

If you still have unused RRSP contribution, this is the perfect way to apply the “double dip” RRSP investing strategy. This way, you will get an additional tax refund next year 😉

#3 Pay down your debts

There is nothing like putting a lump sum payment on your mortgage to pay it faster. If you wonder if you should pay your mortgage or invest your money, why don’t you contribute to your RRSP’s and use your tax refund to make a lump sum payment on your mortgage? With this tax refund strategy, you will be able to A) build a comfortable retirement and B) pay your mortgage faster!

#4 Do something that will last with your tax refund

I usually take my tax refund and use it for something specific that will last: doing home renovations, buying deals (BBQ, appliances), do landscaping, invest in my company, etc. I usually try to use my tax refund in a way that it will remind me how great it is to receive a good cheque from the government.

We don’t always want to make budget sacrifices to invest in our RRSP’s, or to take a good hour to look around the web to make sure we have every penny back we are entitled to. Or to keep track and gather all the paperwork that will grant us the right to claim all those tax deductions and tax credit.

So this is why I try to use my tax refund in a way that I will remember for next year. What about you, what is your tax refund strategy?

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March 10, 2010, 5:21 am

Income Tax Deadline April 30th 2010: Tax Credits vs Tax deductions

by: The Financial Blogger    Category: Taxes

One of the things I hate most in life is taxes… Yeah I know, I am a “numbers guy”, I work in a financial institution so I should not hate tax season. But the fact is that filing income tax is so boring I am whithering away while gathering my tax paperwork.

2009-2010 income tax deadline: April 30th 2010

Now that the RRSP season has ended as of March 1st, it is time to gather all your paperwork to efile your income tax report. When is the deadline? End of April! So you better get to work fast 😉

Don’t wait until the deadline; this could be costly

The problem with income tax reporting is that nobody likes it (besides the accountants). And I guess this is how the Government makes so much money from us even though they offer many tax deductions and tax shelters. Most of us gather a few papers and quickly put them in an envelope for an accountant or we key it into tax filing software (remember my 2009 quicktax review?).

This is why you have to start gathering your stuff right away; in order to make sure you have everything and that you have gathered all the proof that will result in a tax credit or deduction.

Speaking of which; what is the difference between a tax credit and a tax deduction?

I guess that you thought they were synonyms, right? Well before you get to the income tax deadline, you better read the rest of this post:

Non-Refundable Tax Credit

A Non-refundable tax credit is an amount that reduces your taxes owed. Therefore, you won’t get money back if you have more tax credits than taxes owed.

The tax credit is calculated as followed: amount claimed x lowest federal rate (province will also give an additional tax credit depending on where you live). Therefore, if you have spent $500 in your children’s activity (maximum allowed as tax credit in 2009), you will get a tax credit of $500 * 15% = $75.

So the non-refundable tax credit is a good thing but will always be worth less than a tax deduction if you make a lot of money.

Among the most popular tax credits you can find:

–         tax credit for donation

–         tax credit on home renovation

–         child amount tax credit

But for all the non-refundable tax credits, I suggest you go visit non-refundable tax credit table.

Tax deduction

I really like the concept of tax deduction as you deduct the amount from your income. Which means that you are actually deducting taxes according to your marginal tax rate.

Therefore, if I take back my example with an amount of $500:

If you made an RRSP contribution of $500 and your marginal tax rate is 25% (on federal tax only), you will get $125 back. The great part is that considering most provinces, your combined (provincial and federal) marginal tax rate will be around 35%-40% if you are making over 50K. Then, your tax deduction could reach $200 at a 40% tax rate.

Here is a quick list of popular tax deductions:

–         RRSP contribution

–         Interest expenses

–         Child care expenses

Here’s is tax deduction quick list found at

As you can see, it is important to gather all your paperwork leading to your non-refundable tax credits and tax deductions before the income tax deadline of April 30th 2010. This could save you a lot of money!

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February 26, 2010, 5:00 am

Fill Tax with QuickTax: TFB is Giving 2 Copies!

by: The Financial Blogger    Category: Taxes

Earlier this week, I was telling that I tried filling my taxes with QuickTax. I have received a free copy and I really liked it! The great news is that I have also 2 more copies to give away!

The version is QuickTax Standard (you can find more info in my QuickTax review) and worth about $40. We are shipping it for free to 2 Canadians!

QuickTax Tax Filling Software Giveaway rules:

Since I am doing the giveaway today, I have decided to put it with my Financial Ramblings (usually posted on Saturday’s). For the occasion, I have also thought of making a Special Canadian Financial Ramblings. So here are the great Canadian read for this week:

10 ways to save money on a new car @ Million Dollar Journey

Time to be contrarian? @ Intelligent Speculator

Finish to learn dealing with nerds @ Four Pillars

Force your kids to play Wii? @ The Rat

More QuickTax giveaway @ Where Does All My Money Go

Spending Money Wisely @ Canadian Finance Blog

Semi-retired calculations @ Canadian Dream

Hidden advantages of dividend investing @ The Dividend Guy

Prove that you are a valuable employee @ Thicken My Wallet

DRIP info on Tim Horton’s @ Canadian Capitalist

Student Credit Card Check List @ Studenomics

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