Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

6 ways to save money by upgrading your Place of Business

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Photo: Pexels-Pixabay

By Sia Hasan

Special to the Financial Independence Hub

No one likes the sting of putting out money for building repairs, but if your initial investment could save you hundreds, maybe thousands of dollars, it’s well-worth the momentary pain. These same upgrades will also help you avoid costly damage that would end up making a bad situation even worse. If you’re the owner of a business or company, here are six commercial upgrades that could keep you in the green.

Get into hot water

Most people try to stay out of hot water, but the fact is that everyone needs it and it can get expensive if your heater isn’t efficient. When your hot water tank is old, rusty or leaking, don’t try to squeak by for another year. For example, if you live in California, contacting a water heater company in Granada Hills and changing out that old tank, or selecting a newer “tankless” system, will start saving you money right away. Once you’ve got a new tank in, always remember to keep the water temperature just hot enough and never on the highest setting, and you’ll see the difference in your bill.

Change out your bulbs

Changing out your company’s lighting is the easiest tip you probably never thought of. In a place of business, lights are in use all day, every day, so why not save every penny you can? Switching your regular incandescent bulbs to energy-saving LED bulbs will use 75% less energy. They also last 25 times longer than regular bulbs! In a building where the lights are on all day and possibly all night, switching to LEDs will save you significant money.

Weatherize the Building

Just like you save energy at home, you should do the same at your workplace and weatherization is just the ticket. For example, you know that drafty area everyone complains about? That’s hard-earned money going right out the window. Before you lose any more, now’s the time to seal up or replace those loose fitting windows and doors, making the building attractive as well as efficient. If your office gets extremely cold during chilly days, consider brand new insulation or adding to what you already have.

Take advantage of the Sun

More and more businesses are deciding to harness the energy of the sun to help with costs. Using solar power can greatly reduce your electric bill, but is most compatible with larger establishments that have the space to install an adequate size system. Continue Reading…

The Ups and Downs of passing your Home down to Family

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By Holly Welles

Special to the Financial Independence Hub

You’ve recently encountered an important decision. Should you pass down your home to your family? Many people make this choice before weighing a few pros and cons. It’s essential to examine this situation from every angle. Otherwise, you may create an unnecessary and unwelcome problem for you and your loved ones.

Here’s a look at whether you should pass down your property:

1. )You could redistribute your Wealth

Here’s a central reason why individuals decide to pursue this process. While houses themselves don’t always appreciate, your land has likely accrued value over time: and your family can benefit as a result. That occurs because land as a commodity isn’t readily available. Many homeowners don’t own any assets more expensive than their houses. You can ensure your family gains more wealth by giving them your residence.

They’ll likely thrive financially if they take specific actions. For instance, they could sell your home to create a monetary cushion. They may even want to move from their current residence to reduce their expenses. In some cases, it’s smart to pass down your house so you can assist them in managing finances.

2.) You may cause issues between Heirs

It’s not guaranteed whether your heirs will find a way to manage this transaction. Various concerns may arise between them. It could create jealousy if you trust your home to one sibling or child. But if you divide your home amongst multiple heirs, disagreements over ownership can still happen. You may cause more problems than you originally anticipated.

You’ll also want to consider what may occur if you’re alive while this process takes place. You may have to face a few different scenarios that create difficulties for you personally. Make sure to choose a method that protects you. It’s always best to think about your interests, too. If you move forward with this transaction, take steps to resolve issues that may occur after you pass.

3.) You can downsize to a smaller place

As you age, it’s often harder to care for a large home. That’s why many older adults tend to downsize into a rental community. They don’t have to deal with the costly maintenance that tends to come with more expansive space. It may also be a more immediate experience for some families:  if you have unexpected health issues that don’t allow you to climb steps, it’s likely time to find a home without an upstairs level. Continue Reading…

Educating your Canadian children in the United States (Part 1)

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Princeton University

By Elena Hanson

Special to the Financial Independence Hub

Congratulations! You are sending your son or daughter to college in the United States to further their education and help put them on the road to a great career. But have you as the parent done your due diligence to make sure this doesn’t end badly with a big chunk of money ending up in the hands of the IRS? It could happen.

The IRS has long arms and extensive resources, and once it starts examining the earnings and assets of your child who is attending a U.S. school, well, as the saying goes all is fair in love and war. What’s more, the IRS might even wind up investigating the finances and assets of the whole family!

How do you avoid a muddle with the IRS? Good, sound, cross-border tax planning. That’s how. It will protect the income and assets of your child, and of you, and ensure full compliance in Canada and the U.S.

Start with the Visa

Let’s go to the beginning. Your son or daughter has been accepted for admission to the U.S. university or college of their choice, which means they have an F-1 Student Visa or a J-1 Exchange Visitor Visa. All the necessary documentation is complete and there is nothing to worry about.

Well, not exactly. As Canadians you better be up to snuff on all the rules for your child to attend school south of the border or Uncle Sam might have the last laugh, and here’s why. The moment Bobby or Jennifer sets foot in the U.S. the IRS day-counter gets rolling. They keep tabs on the number of days your child is in the country and this is why you, the parent, must do everything to make sure your Canadian child retains their status as a non-resident alien.

Tax residency in the U.S. is based on citizenship/lawful permanent residence (i.e., Green Card) and/or the Substantial Presence test (i.e., days present in the U.S.). This means that if your son or daughter is not a U.S. citizen or a Green Card holder, they will likely meet the criteria for the Substantial Presence test, which is calculated based on the number of days spent in the country over a three-year period. So, if your child’s magic number is 183 days or more, they are considered a U.S. tax resident.

Key is avoiding U.S. residency status

Thus, avoiding U.S. residency status is key and you can do that by filling out a form: Form 8843, which is called ‘Statement for Exempt Individuals.’ It allows students to exclude the number of days they are present in the U.S. for purposes of the Substantial Presence test. But the student must avoid any activities that disqualify this exemption. That could be looking for a job or buying a home in the U.S., or marrying a U.S. person.

If the student has a home in Canada and actively maintains it, but they do not qualify for the exemption as per Form 8843, they can still avoid U.S. taxation on their worldwide income and those IRS filings because of the Canada-US Income Tax Convention (the Treaty). And even if your child is not able to maintain their non-resident status, being aware of a few important things can be a big help.

It all has to do with good tax planning. Here are some examples: Continue Reading…

8 ways to protect Seniors from Financial Fraud

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By Mikayla St. Clair

Special to the Financial Independence Hub

There are tons of financial scams aimed at taking advantage of senior citizens. One of the key reasons the elderly are targeted for scams is that many of them grew up when deals were made and based on a person’s word and character. A handshake, many years ago, was enough to trust someone. Many elderly and senior citizens grew up in an era when people were more trustworthy, and scams like financial fraud were not as prevalent as today. There are other reasons why the elderly are targets for financial fraud, and understanding how thieves go about stealing from senior citizens will go a long way in prevention. Here are eight ways to protect seniors from financial fraud.

1.) Shred sensitive documents

A good shredder can go a long way in preventing financial fraud, but it only works if you use it. Many people fail to shred sensitive documents and simply throw them in the trash. Thieves aren’t above going through your trash in hopes of gaining your social security number and other information they can use to open fraudulent accounts or gain access to accounts already open. Shredding the personal documents of seniors helps to prevent others from gaining access to their sensitive information and creating fraudulent accounts in the senior’s name.

2.) Check Credit reports regularly

It’s essential to check the credit reports of older adults under your care. Credit reports should be reviewed twice a year or annually at a minimum. Look for any errors, suspicious charges, or accounts that you don’t recognize. Correct these errors immediately and close any unauthorized accounts. Using a professional credit monitoring service to monitor a senior loved one’s credit is also an excellent way to protect the elderly from financial fraud.

3.) Be cautious of new relationships, friends, and family

Seniors can be more trusting than younger people, especially if they are lonely. Many thieves and fraudsters use loneliness as an entry-point into senior’s life to gain access to financial information or trick them into giving them money. It’s also important to be cautious of friends and family members who may have an addiction or severe financial problems. Sadly, many cases of financial fraud against the elderly are committed by a family member or friend.

4.) Use a Power of Attorney if necessary

In some instances, it may be necessary to take full control of a senior’s finances through a financial power of attorney. A financial power of attorney may be necessary when a person has a mental condition such as dementia or Alzheimer’s. Seniors with these disabilities are often targets because of their health.

A financial power of attorney can give you full control of a person’s finances. If the senior is a family member, discuss the matter with others in the family to determine the best choice for managing the person’s financing.

5.) Watch for changes in Spending

Keep an eye on the spending habits of any older adult in your care. Continue Reading…

6 Tax mistakes every family needs to avoid

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Photo Credit: Kelly Sikkema, Unsplash

By Sia Hasan

Special to the Financial Independence Hub

No one looks forward to filing their taxes each year. The process is time-consuming and stressful no matter how many times you’ve done it in the past. Unfortunately, even the most experienced workers make mistakes when filing their returns and those mistakes can really add up.

The last thing anyone wants to deal with is a formal audit by the IRS [or, in Canada, the CRA] and the more mistakes you make, the more likely that audit is. Believe it or not, it’s possible to avoid the most common mistakes year after year. You just need to know what they are in the first place.

Ignoring late or missing W2s

Your employer is required to send out a W2 at the end of the year [the equivalent of a T-4 in Canada.] This is your wage statement that shows your rate of pay, the amount you earned and the amount of money withheld for taxes from your paychecks. While it’s possible to file without the W2, it’s incredibly difficult and often leads to errors when reporting your income. Instead of ignoring a late, missing or lost W2, get another one reissued. Speak with your company’s HR department and get them to print a new one for you. If they can’t, they’ll be able to request a new copy from the business’s accounting department.

Not paying attention to Deadlines

It’s easy to lose track of time when you’re juggling the responsibilities of busy work and social schedules on top of filing a tax return. Unfortunately, filing late can end up earning you a hefty fine and penalty from the IRS [and the CRA]. If you’re having trouble keeping track of tax deadlines, start filling out your return as early as you can. You should be able to complete the return as soon as you receive your wage statements from your employer and any additional income statements for investments or gambling earnings. You can also set reminders on your phone to help you stay on schedule.

Forgetting to double-check your Return

There’s a lot of data entry involved with tax returns. Each number and piece of information you enter needs to be correct. If there are errors, you could end up dealing with a delay or hard inquiries from the IRS. Continue Reading…