Rebate Time again!

The Great Canadian Rebate is offering 5.25% cash back for Canadian Tire purchase this week. Time to buy the CT gift cards and save on gas!

My Car insurance drop almost $400!

I got the quote for my car insurance renewal from Monnex yesterday. To my surprise, with a speeding ticket last year, they drop my insurance by $366, almost $400!! I will be paying $790 all in for my one year old Mazda3 next year. It is a full coverage as well, including third-party liability, collision, and comprehensive. Not bad at all.

A happy day. I won't complain. :D

About tax return, got my T4, still waiting for some forms

It is tax time! Got my T4 from my company last Friday. ING Direct has sent me T5 and my RRSP contribution statement back in January. The forms I am still waiting for are:

1. T5/T3 from Scotiabank. I have less than $50 interest from my MoneyMaster Savings account in Scotiabank. So I don’t think they will send me a T5. But I do have mutual fund account with them as well. My fund distributed some capital gains last year. I should get a T3 for that.

2. T5 from ICICI Bank. ah, this Indian bank, I should get a T5 from them for my US$ account. However, I totally do not expect any form sent to me in time from them. The customer service from ICICI is as horrible as it can get. So rather than waiting for the T5 to come, I just calculated the interest income I need to file myself and get over with it. Fortunately, I don’t have any investment or RRSP account with them. They do have high savings rate. But I will recommend to have very simple investment account with them, such as savings and GICs.

3. T3 from Questrade. I don’t know what the deadline is for T3. I think it is sometime in March. I need the T3 to file the dividend paid out by my ETFs.

So after I got all the forms above, I can officially file my tax. As calculated roughly today, I should get back all my tax paid during 2007.

I do not want to rush the return this year. I want to identify every possible tax deduction/credit available to me although there might not be any more than I have already known. But it never hurts to double check. Now I just hope I can get all those forms as soon as possible. Then I will be a very happy person.

Tax Free Saving Account

The budget 2008 has been announced today. The following is the highlights:

- Tax exempt saving fund, up to $5,000 annually. No tax on gain, withdraw anytime without penalty.
- 10.2 Billion to pay down debt.
- Maximum RESP time limit extended to 35 years; contribution period extended by 10 years.
- tax break on capital equipment depreciation extended to 2012
- $500-million for investment in public transit.
- A $2-billion fund for infrastructure investment will be made permanent.
- $250-million over five years to help the automotive industry develop more environmentally friendly vehicles.
- $350-million for a Canada Student Grant Program.
- $90-million for older workers hurt by factory closures.
- $300-million to for nuclear energy.
- $330-million over two years to improve access to safe drinking water for First Nations.
- $400-million to encourage provinces to recruit 2,500 police officers.
- $43 million to Communications Security Establishment
- $75 million to Canada Border Services
- Permanent annual increase in military spending of 2% by 2011
- New organization to administrate EI premium.

As you might have noticed, there is a new account type being introduced today. It is called Tax Free Saving Account(TFSA).

What is TFSA?

It stands for Tax Free Saving Account. According to the budge 2008, Starting in 2009, people 18 and older will be able to put up to $5,000 per year in a Tax-Free Savings Account and rack up investment gains without paying taxes at any time, including withdrawal. Any unused contribution room will be carried forward just like your RRSP room. The $5,000 annual contribution limit will be indexed to inflation in $500 increments. Contributions to a spouse's or common-law partner's TFSA will be allowed, and TFSA assets will be transferable to the TFSA of a spouse or common-law partner upon death

What is the benefit of TFSA?

The major benefit of TFSA is that it allows the money you put into it to grow tax free.

Don't we have RRSP to allow my money grow tax free already? What is the difference between them?

The differences are:

- Although the money in RRSP can be withdrawn anytime before actual retirement, you are subject to withholding tax while doing it; the money in TFSA could be withdrawn anytime without any withholding tax with all the gains being tax exempt.

- When you withdraw your money from your RRSP account, your contribution room is forever lost. Withdrawals from TFSA will create contribution room for future savings.

- The money put into RRSP is tax deductible. In other words, you get tax refund from contribution in RRSP. The money you put into TFSA is not tax deductible. Therefore, you use after-tax dollar to fund your TFSA account.

What could be held inside TFSA?

You can hold many investment vehicles inside your TFSA, such as stocks, bonds, GIC, mutual funds, etc. However, please note that since all the capital gains inside TFSA is tax free, it also means any capital loss inside it cannot be claimed to be offset your other capital gains or carried forward. So please think carefully before holding any stocks inside TFSA. Technically, TFSA works the best for the fixed income investment vehicles, such as GIC and bonds.

What works the best to be held inside TFSA?

Like I just said, it works the best for fixed income investments. However, if you think you are a very good trader, you can try to trade stocks inside TFSA. If you make 10% profit, all 10% will be tax free. Also, I am thinking it might be good to hold some nice US DIVIDEND stocks such as Bank of America. Since under regular non-registered account, any dividend from US Stock will be considered as income and is taxed at the full tax rate. I think it will be beneficial to hold those inside TFSA.

It will be another year from the date we can actually contribute to TFSA. I think it will be an interesting topic in the personal finance blog world.

Save with Great Canadian Rebates

The Great Canadian Rebates is a website that offers Cash Back Rebates on almost every purchase and hundreds of online coupons to merchants who will ship to Canadians. It is a very good webiste to save money. It offers cash rebate from 1%-18% on your purchase from the retailers who are partners with them. This includes Canadian Tire(3.33%), Chapters(3.33%), WestJet(1.33%), DELL(1%), Priceline(2%), etc.

I usually purchase Canadian Tires Gift Card through them at 3.33% using my 1% cash back credit card and then use the gift card to buy gas at the Canadian Tire Gas Bar. This way, I save 4.33% each time I fill up the tank of my car. With the Canadian Tire Money being offered, the reward is even bigger.

Also, I just found out that they offer 2% cash back for purchase from Priceline as well. Now I am kicking myself not using it for the trip to Orlando.Otherwise, we could save even more……

I think I should really check into GreatCanadianRebates before I purchase anything online in the future…….

My power bill just shocks me

I got my power bill for Jan 10-Feb 10 in the mail today. To my surprise, the total amount is a crazy $264 for my two-bedroom apartment. We use electronic baseboard for heating. Considering three people living in the apartment, I think it is an acceptable amount. But still, it was a shock to me at the first sight.

Since I want to get a three-bedroom townhouse/house in the next year or two, I am just wondering how much it usually costs each month to heat up a three-bedroom house. Will it be a lot?

2% Cash Back Credit Card

Most of the credit cards offer the maximum 1% cash back for the purchased made. The highest one I have seen and got is the American Express Gold Credit Card. It was by invitation only before and has just began to accept the application from general public recently. Here is the details:

American Express Gold with 2% Cash Rebate (tiered)

Cash Rebates paid in January (once per year):
$0 - $2,500 = 0.5%
$2,500 - $5,000 = 1.0%
> $5,000 = 2.0% (no need to carry balance to get the 2%)
Added Bonus of 0.5% if you carry balance (so you could get upto 2.5% cash rebates)

Sign up through: 1-800-268-2639.

Credit Card information is not available on the AMEX website

- MINIMUM $30,000 annual income required to apply for this card
- Just remembered, there is also no maximum rebate… the sky’s the limit. i.e. If you spend $200,000, you’ll get $3937.50 back

Cash rewards calculator/comparison:
http://www3.telus.net/CalgaryBen/

Note that since this card is tiered, basically you have to spend more than $6250 per year to get better cash back than the Citi Enrich Card.

I applied for this card a month ago and now just wish more places will accept American Express.