Lease vs. buy

Question 1

“Renting is wasting your money” is this true? Alternate viewpoints?

Answer 1

• Renting is renting space
• Buying is renting money

Question 2

“Real estate always goes up” is this true?

Answer 2

• Can go up, down, or sideways, many areas
  declining today
• Cyclical
• Moves slowly – long lasting downturns

Question 3

monthly expenses for home owner

Answer 3

• mortgage
• maintenance
• property tax
• condo fee
• property insurance

Question 4

monthly expenses for renter

Answer 4

• rent
• renter’s insurance
• utilities

Question 5

what is Ben Felix’s 5% Rule

Answer 5

• Take home price multiplied by 5%
• Divide by 12
• Result is breakeven point for rental whether to rent vs buy
  > ie. if we do this calculation and get higher price than rent would be, then advantageous to rent

Question 6

TFSA and RRSP main benefit

Answer 6

Avoid Capital Gains taxes

Question 7

RRSP -how does this work with contributions and money removal?

Answer 7

• Get income tax back when you contribute
• Pay income tax as you take it out
  > Get 33 cents for dollar contribution
  > Pay 26 cents for every dollar you take out

Question 8

TFSA - how does this work with contributions and money removal?

Answer 8

• After tax contribution
• No tax paid when you take it out

Question 9

how much contribution room is in RRSP?

Answer 9

18% of annual earnings, carries forward
indefinitely

Question 10

good idea of an amount to save for retirement in 20023 dollars

Answer 10

• $2,000,000 saved and invested
  > $80,000 annual income

Question 11

types of tax

Answer 11

• Income Tax
  > Corporate and personal
• Sales Tax
• Property Tax
• Payroll, CPP, etc.

Question 12

INCOME TAX SYSTEM
- how does it work? whats included?

Answer 12

Progressive Tax System
* Marginal tax rate increases as you
earn more
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What’s Included
* Employment income
* Interest
* Capital gains
* Dividends

Question 13

new grad veterinarian example pay deductions and net income? average tax rate?

Answer 13

• Working Full-Time in Ontario
  > Earns $110,000
• Marginal Tax Rate
  > 43.41%
  <><>
  Total Tax and Deductions:
• Federal tax = $16,558
• Provincial tax = $8,783
• CPP/EI = $4,757
• Total = $30,098
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  Net Income:
• $79,902, after tax and deductions
• Average tax rate = 27.36%

Question 14

tax avoidance vs evasion?

Answer 14

• Tax Avoidance: Legal and advisable
• Tax Evasion: Illegal and inadvisable

Question 15

how to reduce your taxes

Answer 15

Use All Deductions
* RRSP contributions
* Charitable donations
* Medical expenses
* Union/license dues (CVO)*
* Childcare expenses
* Capital losses
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Defer Taxes and Change Income
* Professional corporation
* Use TFSA and RRSP
* Earn dividends
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- tuition credits

Question 16

How to pay your taxes? deadlines?

Answer 16

Source Deductions
* Employees
* Taxes taken off your paycheck
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Deadline to Pay
* April 30th (April 15th in USA)
* June 15th for self-employed to file
* Quarterly remittances
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Late Fees
* Expensive
* Avoid if at all possible

Question 17

should we do are own taxes as an employee? as an employer?

Answer 17

Employee
* Simple tax situation, few complications
* Considering filing yourself
* Simpletax, Turbotax, etc.
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Self Employed or Professional Corporation
* Enlist an expert
* Accountant to help manage deductions, remittances, etc.