All posts by Jonathan Chevreau

Tax issues for Americans with ties to Canada (& vice versa)

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Brian Wruk

By Brian Wruk, CFP

Special to the Financial Independence Hub

As the Canadian tax deadline quickly approaches, the process of gathering all your tax slips, back-up for your deductions and getting them to your accountant begins or, maybe you are installing the latest tax software. Regardless, if you are a Canadian with some form of tax ties to the U.S., you may need to file a U.S. tax return as well. What kind of ties?

Let’s go through three of the most common ones:

  1. U. S. Citizenship – With all the media coverage, it is becoming common knowledge that being a U.S. citizen means you have to file a U.S. Form 1040 tax return. This is even more difficult to hide from the IRS since Canada signed an agreement that requires Canadian financial institutions to report all financial information tied to a “U.S. person.” This is all part of the IRS Foreign Account Tax Compliance Act (FATCA) initiative to crack down on U.S. citizens evading taxes through foreign accounts. Canadian financial institutions are reporting this information to Canada Revenue Agency, which in turn will provide that to the IRS as permitted by the Canada/U.S. Tax Treaty and the IRS will be looking for a tax return and the appropriate disclosures (FBARs).

Continue Reading…

Try to do a dry-run on your taxes today before RRSP contribution deadline passes

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Wealthy Nest EggBy Jonathan Chevreau

As every red-blooded Canadian investor surely must know by now, today is the last day to make an RRSP contribution for the 2014 tax year.

As I wrote for Motley Fool Canada/MSN Money in two pieces in February (one on RRSPs, the other on the looming tax-filing deadline), today (or better yet the weekend just passed) would be a good time to at least do a preliminary dry run on your taxes.

Why? If you’re a salaried employee, you should by now have received your T-4 slip, which means if you enter the slip into your tax program, you’ll have a pretty good idea of how much tax you’ve already paid and how much you may yet need to pay.

T-4s are here; time to stop procrastinating

Sure, the filing deadline isn’t until Thursday, April 30th, roughly two months from now. But if you wait even until tomorrow, it will be too late to check out your past RRSP contributions Continue Reading…

Is your Findependence action plan truly game-ready?

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Adrian
Adrian Mastracci

By Adrian Mastracci, KCM Wealth Management Inc.

Special to the Financial Independence Hub

No doubt, investors want to be ready for retirement or what this site calls Financial Independence/Findependence.

The bigger question is whether the Retirement/Findependence plan of action is truly game ready for them.

Investors face a multitude of decisions in mapping their roadway to retirement. Preferably, a roadmap that withstands the tests of time. Especially for those who are at the retirement doorstep. Planning retirement is about setting the long-haul course of action to achieve a specific personal return. The course is more than selecting stocks and funds. Some cases may require a total financial makeover.

Start the process at least 15 to 20 years prior to actual Retirement/Findependence. Longer is desirable. Investors need to find that delicate balance between spending for today and saving enough for tomorrow. At age 60, the plan can easily span 25 to 30 years, possibly more. It’s also likely that few if any savings will be added to the portfolio after retirement begins. The nest egg has to sustain income draws for the lifetimes of two spouses.

At KCM, we have assembled five fundamental steps to improve your game plan readiness prospects: Continue Reading…

When Finances Matter: Buying Advice for Potential New Home Buyers

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First time buyersBy Jennifer Caughey,

Special to the Financial Independence Hub

A paid-for home is the foundation of financial independence, according to this web site. But long before you reach that stage, stepping up to buy your first home can be a daunting process. It takes time and careful planning. Finances are especially important when you’re considering taking the huge step of buying your first home.

Not only do you have to consider whether you can come up with the down payment and closing costs, but you also have to think about whether you can afford the upkeep of ownership, potential repairs and improvements, and the full cost of buying a home in the first place (including principal and mortgage interest payments). There are a lot of variables to consider and potential home buyers need to be prepared for everything involved in the home buying process.

The True Cost of Home Ownership

Financially speaking, buying a home is a big deal. There’s a lot to think about in terms of where the money will go. It goes well beyond just paying for the home that you decide upon. There are plenty of areas where you have to ensure that you can afford this process, including: Continue Reading…

Weekly wrap: a Financial Independence Index, Death by Golf, Big OAS and more

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silhouette of a man swingingIt seems our labours here at the Financial Independence Hub have not been totally in vain. At the Globe & Mail, Ian McGugan has introduced something he calls The Financial Independence Index, which he says was inspired by Scott Burns’ Financial Freedom Index. McGugan — who was the founding editor of MoneySense magazine — says his index is not about retirement readiness but about financial independence and estimates couples need $4.5 million to be truly findependent (of course he doesn’t use that term, yet). Ian, if you’re reading this, why not shorten it to the “Findex?,” a term coined by certified financial planner Fred Kirby in a little inside joke with me. You can find Fred’s coordinates at the Getting Help section here at the Hub.

Whether it’s Findependence, Retirement or Unretirement, an article in Inc. — Death by Golf — argues Retirement is a bankrupt industrial age idea anyway. The article introduces the term Conation, which it defines as “Committed Movement in a Purposeful Direction.”

At Retirement Redux, Sheryl Smolkin asks the intriguing question whether the government should expand OAS instead of CPP. Or go to the original article here. In the past, proposals to expand the Canada Pension Plan have been referred to as “Big CPP” so I guess we should refer to an expanded OAS program as “Big OAS.”  You heard the term first here at the Hub!

Do you own too many mutual funds? Hard to top the US$1.5 million spread among 35 mutual funds mentioned by Roger Wohlner in his blog at the Chicago Financial Planner. Continue Reading…