Tag Archives: taxes

How to Reduce Taxes

As working people ascend to higher levels of success, they will inevitably wish to maintain their financial earnings. This can be particularly challenging when tax season comes around. For this reason, many hardworking individuals are constantly seeking out various means of reducing their taxes and holding onto the money which they have rightfully earned.

Thankfully, there are a host of legal means which people can employ as they work to decrease their tax bills. The following options and tools may not have been readily available to them in the past. However, this knowledge and information will certainly prove to be beneficial in current and future times.

Look into Write-Offs and Deductibles

One of the easiest and most simplistic ways for people to reduce their taxes is by writing off expenses which qualify as deductibles, explains Entrepreneur. The majority of expenses which qualify as deductibles are generally professional expenses or closely related fees. Transportation, royalties, payroll fees, and other costs can be written off during tax season. However, applicable deductibles will vary from person to person, seeing as no two individuals have the exact same situation.

Not all expenses are deductible and, as a matter of fact, attempting to write off certain fees can actually garner legal trouble, affirms Cleveland 19. There are different ways to write off certain expenses and various situations which qualify. For the average individual who lacks familiarity with tax laws, this can be quite nuanced and complicated. Therefore, many people contract the services of accountants and tax specialists.

Delay Certain Payments

Another clever (and legal) way of lessening your taxes is by simply “deferring” certain payments, as stated by Kiplinger. Waiting until the new year to cash certain checks, billing clients towards the end of December, and delaying certain dividends can come in handy.

Individuals who are unsure of how to delay certain payments can consult financial advisors for advice which specifically tailors to their present situations.

Save Money for Retirement

Time affirms that individuals who put funds aside towards their retirement are able to qualify for what is known as a 401K “pre-tax.” In essence, putting aside money for this form of retirement allows people to withdraw the number of saved funds from what is considered as taxable income. Moreover, taxpayers are permitted to subtract a maximum of $5000 worth of funds within a traditional IRA.

To make a long story short, saving money for retirement really pays off when tax season rolls around.

A Final Word

Taking advantage of all legal means to reduce owed taxes is absolutely paramount. Many individuals may be shocked to learn just how many deductibles they can write off. Delaying certain payments and putting aside money into 401K and IRA accounts also wields significant payoffs. In some of the best case scenarios, hard-working people have been able to save so many funds in taxes that the government ultimately wound up owing them money!

 

Authored by Gabrielle Seunagal

Financial Secrets Every Job Quitter Should Know

So, you hate your job and want to quit? Are you really ready to do something like this? Don’t forget the everyday costs you have! While it is your personal choice to decide when to quit a position, it is also important to realize that decision has to be owned. If this is going to put you in a bad financial situation then you should wait. It’s smart to be wise and think twice! Let’s discuss some options and tricks that might help you make that smarter decision today! Many Canadian families rely on both partners working, so if one ups and decides to just quit–there has to be a strategy. Let’s examine some thoughts.

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If you’re going to quit your job you really have to have some kind of financial backup plan. Let’s face it. No one can just up and quit work without dealing with some kind of financial distress–that is, if they have no plan in place. Just to begin, you have to analyze your financial circumstances very well and determine if this is really the year that is right for quitting your job. Only you know if it is the right time for attempting to start over somewhere else. If you’ve been preparing for such a move, then that is great. If you have not then you need to make certain you have enough to sustain you and your family for several months. This will alleviate a great deal of financial stress.

Right now, 47% of Canadians are committed to staying on track financially, which is great. With this in mind, it is pretty certain hasty work decisions are minimal, but of course, things can happen too. When you’re resolved to be financially ready to leave your job, then you have a step up. This is a good thing. However, if you are intent on finding a career position that is going to help you gain a foot hold over debt and assist you in meeting financial goals–right now might be the best time.

The following tips and strategic advice might be helpful to Canadians who are unsure where to start, what they should be doing, and what needs should be in order. Hopefully those leaving their current positions have started banking resources and have a starting plan.  Let’s now turn to some helpful advice and tips now.

The Importance of Cutting Expenses When Quitting Your Job

Of course it makes rational sense to cut back on your expenses when you quit your job. Even if you have a nest egg put back, this can go fast with no income coming in. Once you’ve made that step into new territory you have to itemize and make priorities. You have to be willing to cut back on excessive items and with regard to food, you have to be more willing to go with no name brands on some items. Of course, this isn’t forever, but it is until you find that position you’ve been searching for.  The below list will help you stay on task and keep the important things in order!

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  1. Make sure you have your mortgage in order–Banks don’t care about why you left your job, they only care about ensuring they get paid! You have to make certain you can pay your mortgage and keep a roof over you and your family’s head. This is when you have to know where to cut back and what is most important to pay on time! Also, if you don’t own a home yet, quitting your job could really hurt your chances down the road. Banks frown on those who just up and quit. This could impact your chances for more than 3 years, so once again–have a plan!
  2. Don’t let tax time catch you unprepared–If you quit your job to start out on self employment you need to have an idea of what those end of year taxes are going to be like. It might not be the wisest decision to run your own freelance business at this time. Decide if you’ll be doing better financially working on your own and choose wisely! This has to be sustainable for the long-term. There is no skirting taxes.
  3. Don’t take out loans and don’t borrow from anyone–You have to stand on your own two feet, so forget a loan or borrowing–even if this is from family. Once you make the decision to quit your job you have to own it and accept the consequences. Be prepared and ready!
  4. Create consistent income–If you’re going to work for yourself then you’re going to have to develop a plan to guarantee the same amount of income week to week and month to month. There can be no variation if you’re going to meet all financial goals and save money too. Be smart here and know what you’re getting into!
  5. Don’t just count on will-power–If you don’t devise a way to save money before you even see it, will power alone won’t help you much. Most people always find an excuse to spend, but if you can have money taken from your pay before you even get it, that guarantees saving and having when you need it the most!

 

 

 

Saving Or Investing: What Is Right For Canadians?

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You have to weigh what is going to give you the best return for your financial future.  If you have a great job, good benefits, and an excess in funds, perhaps investing some of that excess is right for you.  However, if you work a traditional job and have very little left over after bills and other necessities–saving that extra might be the smarter choice.  60% of Canadians appear to be saving more for their retirement, in comparison to others who are choosing investing.  Remember though, some Canadians don’t have enough money left over to do much of anything with, but this can be changed too.

BlackRock, a well known global investor recently polled 2000 Canadians and 52% of those saving for retirement were between 25 to 34 years of age.  Older Canadians are saving for retirement as well, but out of these groups, none are really saving wisely, or seriously weighing in on investment plans.  When it comes to investing, it seems that a lack of investment knowledge is the problem.

Below, you’ll find various considerations to make when it comes down to choosing to save or invest.  It is important to point out that age is one of the primary reasons for so many Canadians not going the investment route.  It is seen as too risky.  However, if you invest in what you know, what you’ve researched, and what seems almost certain to give you a return–you’ll find this is the wise decision!  The below tips will possibly help you find some solid footing when you’re debating what is right for you.

Tips To Help Canadians Make The Right Financial Choice

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  1.  A middle-class Canadian couple should begin by crunching their numbers and determining what it is they are going to need to have a comfortable retirement.  If they are already in the income bracket of $42,000 to $72,000 should easily be able to invest and still have a nice nest egg for retirement at the same time.  So, again, beginning to analyze finances is the first tip that should dramatically make a difference.
  2. Weigh in on low interest rates and consider inflation!  These are critical key factors when you’re trying to choose between saving and investing.  What is going to give you the better return, and what is going to secure your retirement comfortably?
  3. You do need to consult with a financial adviser if you’re not meeting your target goals!  Too many think it would be a waste of time, but the fact is only 38% of Canadians utilize a financial adviser, which is a huge mistake.  This is especially true when looking at the economic disappointments so many feel burdened by.
  4. Pay attention to your personal economy!  This is often overlooked–more to the point, commonly overlooked. The economy can tell you a lot about what direction to go in financially.  So, think about your job, your earnings and where you want to be in 20 years!