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Are you working from home and at the same time have your MyCRA account open on another tab? Are you doing your 2020 taxes and looking for some quick tax deductions for which you don’t need documentation proof? Then the $400 home office expense deduction is for you. The Canada Revenue Agency (CRA) introduced this temporary deduction only for 2020 for those who worked from home during the lockdown. Here is a quick guide on this deduction.
The home office expense deduction is not a new benefit, but it was mostly used by freelancers who worked from home. But that is a lengthy process and requires a lot of calculation. There are three layers of calculation: the utility and other bills, the portion of your home used for work, and the number of working hours. All this was fine while a small segment of the population availed the deduction.
Today, my wife and I regularly go over our spending and our accounts to look at how we can improve and try to adjust our finances. This has allowed us to get on the same page financially and to align our financial goals. Together, my wife and I are in the top 1% highest net worth for people our age in Canada. We didn t get there with a get-rich-quick scheme, though it took careful planning and thoughtful budgeting and spending.
I saved my first $100,000 by age 24
I ve always been a saver, and reaching $100,000 CAD in my savings account was my first big financial goal when I finished university and realized it was possible. I was 22 years old when I graduated, and my starting salary was just over $50,000 CAD. I realized that I had two choices: I could use this money to spend lavishly and treat myself to nice things, or I could live as if I had less, and be able to save a large amount of my hard-earned money. Spoiler alert – I chose the latter.
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Many will not save unless the situation demands. Others can’t set aside money due to financial priorities. The 2020 global pandemic would have brought financial hardships if not for the government transfers. Fortunately, the health crisis produced a twist for the better. Canadians suddenly saw the importance of financial well-being, not just personal health.
According to Statistics Canada, the household savings rate grew in the early months of the pandemic. People controlled their spending and kept more cash to avoid financial dislocation. If you have no savings, it’s not late to make it a habit and build a fortune. A simple but realistic three-step guide will help you secure your financial future.
TFSA Investors: Got $6,000? Buy This Dividend Stock Now
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Canadian savers and investors look forward to the annual contribution limit for the Tax-Free Savings Account (TFSA). The Canada Revenue Agency (CRA) usually makes the announcement every November. There have been 12 announcements since the introduction of the TFSA in 2009.
For 2021, the annual contribution limit is $6,000 the same as in 2019 and 2020. Someone who has never contributed to a TFSA and was 18 years old on the account’s inception will have a cumulative contribution room of $75,500 on January 1, 2021. You’re doing all right if you’ve been maxing out your limit each year.