Tax Time
- Thread starter [7F]Piet
- Start date
![[7F]LarryBoy](/forums/data/avatars/m/1/1106.jpg?1442680067){kind=avatar}
[7F]LarryBoy
New Member
Not sure, I haven't done my yet. I should get on that right away tho. I expect to get some cash back.
Avesther
New Member
nt
LIM
LIM
[7F]LarryBoy
New Member
not so. You get money back from charitable donations (like tithe, etc).
Avesther
New Member
nt
LIM
LIM
Avesther
New Member
nt
LIM
LIM
Avesther
New Member
Please forgive me for bothering you.
Avesther
New Member
Are you tithing out of obedience to the Lord or are you doing so you get a bigger refund?
The only money you get refunded back to you is/was YOUR money to begin with.
And it is not our money anyway. It all belongs to God.
Take this hypothetical situation into consideration
You earn $3,000 a month.
Deductions will be about (based on 2004 rates): CPP 134.06, EI: $59.40 and tax 508.05 leaving you with $2298.49 a month.
You also tithe to the church 10% = $300. This leaves you with $1998.49.
At the end of the year, your donation credit will generate a refund of tax deducted in the amount of: $1378.00. What ever you do with that is up to you, consider the following:
$1,378 / 12 = $114.83 / Month. Put into savings (even though the rates are low) = $1,379.54. Well you are a little ahead. Lets say you have a mortgage at 5%, $90,000 outstanding, 20 years left making monthly payments. The extra payments per month will save you $6,548.72 in interest over the life of the mortgage. That is an 8.1% return. Assuming you only increased the payments during the first year. It gets even better if you keep doing it over the whole mortgage.
Even if you have student loans, it would be better to increase your monthly payments. And if you are debt free, increase your charitable gifts, more food on the table, its just a bit more of your money in your pockets today that you can do something with. Remember it does not belong to the government just because it has been deducted from your paycheque.
Don't use the government as your savings account, they don't pay interest. There is very little difference between using the government as a savings account of your talents then burying them in the dirt. The Lord warned us about this in the parable of the talents. It was far better for the third guy to have put his single talent in the bank and earn a measily sum in interest of $1.54, then to bury it in the dirt and get nothing for it. Again, to reiterate, it is not the governments money, it belongs to our Lord. And Jesus wants you to have it and to invest it in his Name and have it multiply.
I use Christian principles when I do financial planning for all my clients, even for those who aren't Christian. It is actually "more" biblical (in so far as I mean there is more scripture and scriptural support) to work towards being debt free and giving more money back to God through charitably giving to the needy (not necessarily to the church) then to even plan for your own future (ie...through RRSPs). I am not saying to not plan for retirement.
Take also this into consideration:
You are a student and you have earned $7,000 for the whole year. You live with your parents so the money went to tuition, books, some fun expenses and you donated $1,000 to your church. With your employer, you filled out the TD-1 and found out no tax will be deducted from your paycheques, only CPP and EI, amounting to $173.20 and $126.00 respectively for the whole year.
How much of a refund will you get because of the $1,000 in charitable donations? In case you are unsure, the answer is zero. Your income is less then $7,800, you are technically non taxable federally and because it was less then $13,500 provincially, you are also non taxable provincially. So, the employer was right to not deduct any taxes for the year. Thusly, the government has none of your money to refund back to you. So the charitable donations and the tuition credits will be carried forward to the next year. These are considered non refundable tax credits as they can only be used to reduce your net federal tax liability on line 420 and your Provincial tax on line 428 to a minimum of 0, never less.
So, in this case, your charitable donations will not get you a refund as the amounts on line 420 and 428 will already be zero long before you can add up your donations.
If you understand, good, if not, well, what you do know is upto you. Either way, I am rambling and must get back to all the tax work I must do as April 30 looms just a few weeks away.
The only money you get refunded back to you is/was YOUR money to begin with.
And it is not our money anyway. It all belongs to God.
Take this hypothetical situation into consideration
You earn $3,000 a month.
Deductions will be about (based on 2004 rates): CPP 134.06, EI: $59.40 and tax 508.05 leaving you with $2298.49 a month.
You also tithe to the church 10% = $300. This leaves you with $1998.49.
At the end of the year, your donation credit will generate a refund of tax deducted in the amount of: $1378.00. What ever you do with that is up to you, consider the following:
$1,378 / 12 = $114.83 / Month. Put into savings (even though the rates are low) = $1,379.54. Well you are a little ahead. Lets say you have a mortgage at 5%, $90,000 outstanding, 20 years left making monthly payments. The extra payments per month will save you $6,548.72 in interest over the life of the mortgage. That is an 8.1% return. Assuming you only increased the payments during the first year. It gets even better if you keep doing it over the whole mortgage.
Even if you have student loans, it would be better to increase your monthly payments. And if you are debt free, increase your charitable gifts, more food on the table, its just a bit more of your money in your pockets today that you can do something with. Remember it does not belong to the government just because it has been deducted from your paycheque.
Don't use the government as your savings account, they don't pay interest. There is very little difference between using the government as a savings account of your talents then burying them in the dirt. The Lord warned us about this in the parable of the talents. It was far better for the third guy to have put his single talent in the bank and earn a measily sum in interest of $1.54, then to bury it in the dirt and get nothing for it. Again, to reiterate, it is not the governments money, it belongs to our Lord. And Jesus wants you to have it and to invest it in his Name and have it multiply.
I use Christian principles when I do financial planning for all my clients, even for those who aren't Christian. It is actually "more" biblical (in so far as I mean there is more scripture and scriptural support) to work towards being debt free and giving more money back to God through charitably giving to the needy (not necessarily to the church) then to even plan for your own future (ie...through RRSPs). I am not saying to not plan for retirement.
Take also this into consideration:
You are a student and you have earned $7,000 for the whole year. You live with your parents so the money went to tuition, books, some fun expenses and you donated $1,000 to your church. With your employer, you filled out the TD-1 and found out no tax will be deducted from your paycheques, only CPP and EI, amounting to $173.20 and $126.00 respectively for the whole year.
How much of a refund will you get because of the $1,000 in charitable donations? In case you are unsure, the answer is zero. Your income is less then $7,800, you are technically non taxable federally and because it was less then $13,500 provincially, you are also non taxable provincially. So, the employer was right to not deduct any taxes for the year. Thusly, the government has none of your money to refund back to you. So the charitable donations and the tuition credits will be carried forward to the next year. These are considered non refundable tax credits as they can only be used to reduce your net federal tax liability on line 420 and your Provincial tax on line 428 to a minimum of 0, never less.
So, in this case, your charitable donations will not get you a refund as the amounts on line 420 and 428 will already be zero long before you can add up your donations.
If you understand, good, if not, well, what you do know is upto you. Either way, I am rambling and must get back to all the tax work I must do as April 30 looms just a few weeks away.
![[7F]Otter](/forums/data/avatars/m/1/1114.jpg?1442680067){kind=avatar}
[7F]Otter
Moderator
Wow... no kidding. Fortunately, I am EI exempt, so I do not pay that anymore. Any loopholes to climb through, I will try to climb through them. After all, the government doesn't do what I want with my money anyway. Why should I give them more than I absolutely have to?
Avesther
New Member
Own your own business otter?