4 steps to getting your budget and debt under control
Congrats! You re a parent now, which means it s time to get a handle on your budget and debt management. These simple steps will help you get started. Photo: iStock/ kate sept2004
Not all of us are the type to keep careful track of money in, money out. But now that you’re responsible for another human being, it’s time. If the words “budgeting” or “cash flow” paralyze you and the task of getting on top of your finances
1. Lay it all on the table
Sit down and finally figure out all the money that’s coming in every month and everything that’s going out. Fixed expenses the ones that don’t change month to month typically include rent or a mortgage payment, hydro,
Five reasons to open an RRSP A Registered Retirement Savings Plan (RRSP) is an account, registered with the federal government, that you use to save for retirement. There are a number of benefits. . .
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You might be thinking that you just finished doing taxes in September 2020, and the tax season has returned in fewer than six months. Last year, the Canada Revenue Agency (CRA) extended the tax-filing deadline from April 30 to September 30, 2020, in the light of the pandemic. The CRA has made it clear that this year, there won’t be any extensions to the tax deadline.
Prepare to do your 2020 taxes
The CRA has also created a page, “Doing Your Taxes,” giving a step-by-step guideline on filing tax returns. The last date to file and pay your 2020 income tax is April 30, but the CRA has urged people to file their returns as early as February 22.
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I will explain the above paycheck deductions with an example. Juliet is a graphic designer in Ontario and has an annual taxable income of $62,000 in 2021. Every month, her employer will deduct $264 in CPP contribution, $74 in the EI premium, and applicable income tax. You can opt to stop your CPP deductions under special circumstances.
How can you reduce your income tax?
Even if your income remains unchanged, you can benefit from higher tax deductions and tax credits. Just like the paycheck deductions, the CRA also increases the tax credits after adjusting for inflation. It has increased the basic personal amount to $13,808 for 2021 from $13,229 for 2020. The CRA has also introduced new tax credits, like the digital news subscription tax credit and Canada training credit.
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The Canada Revenue Agency (CRA) has announced a few updates for 2021 that are extremely important for investors and taxpayers. The government agency just disclosed three updates with respect to the Tax-Free Savings Account (TFSA), Canada Pension Plan (CPP), and the Registered Retirement Savings Plan (RRSP).
CPP enhancement for 2021
The CPP enhancement will impact millions of employed and self-employed Canadians that contribute towards the pension fund. This will also impact businesses that need to cover 50% of employee contributions.
The CRA states the maximum pensionable earnings for 2021 will rise from $58,700 to $61,600 due to a rise in CPP contribution rates. In January 2021, the employee and employer contribution rate will increase to 5.45%, up from the current 2020 figure of 5.25%. This means the contribution rate for self-employed Canadians will increase to 10.9% from 10.5%.