What is the Ontario staycation tax credit?
With the Ontario Staycation Tax Credit, the Ontario government is encouraging residents to rediscover the province and support the province’s crucial tourist economy for the 2022 calendar year. When completing your personal income tax and benefit return for 2022, Ontario individuals can claim 20% of their qualified lodging costs. This may include a stay at a hotel, cottage, or campsite. Individually, you can claim up to $1000 in qualifying costs, or $2000 if you have a spouse, common-law partner, or eligible children, for a total refund of up to $200 for an individual or $400 for a family.
Who is eligible?
You are eligible for this credit if you are an Ontario resident on December 31, 2022. Only one person per household is eligible for the credit each year. The qualifying costs of your spouse or common-law partner, as well as your eligible children, can be included in your claim. If you don’t have a spouse, common-law partner, or eligible child, you can still claim the credit for your own qualified expenses.
Eligible Expenses
The Ontario Staycation Tax Credit encompasses accommodation expenses for leisure stays of less than a month in Ontario. The tax credit is only valid for stays between January 1, 2022, and December 31, 2022, regardless of the timing of payment for the stays. The accommodation expense must have been paid for by you, your spouse, or common-law partner, or your eligible child.
Accommodations include hotels, motels, resorts, lodges, cottages, bed-and-breakfast establishments, campgrounds, and vacation rental properties. To validate these expenses during tax season, keep your detailed receipt to claim the credit. The receipt must include:
- Location of the accommodation
- The dollar amount for the accommodation portion of a stay
- The amount of any/ paid GST, HST
- The date of the stay
- Name of the payor
Ineligible expenses
The Ontario Staycation Tax Credit does not include a timeshare agreement, a stay on a boat, train, or other vehicles that can be self-propelled. The tax credit cannot be claimed for:
- Expenses for car rentals, fuel, flights, groceries, parking, or prices of admission into local attractions and places of interest.
- Accommodation expenses reimbursed to you
- Expenses that are incurred for school or educational purposes, or for work, employment or business purpose, or that can be claimed for a medical expense tax credit.
The scope of the Ontario Staycation Tax credit is to make travel more accessible and invite Ontarians to explore the province. The tax credit will help individuals and families save on local trips while also reviving local tourist industries. The goal is to keep Ontario competitive in the global market. The Ontario Staycation Tax Credit is estimated to provide $270 million in support as part of the 2021 Ontario Economic Outlook and Fiscal Review: Build Ontario. The tax credit is also expected to provide support to about 1.85 million Ontario families. If you’re looking to use this benefit for your next getaway be sure to check if you are eligible and what expenses qualify to begin planning your local trip today.
How Can A Financial Plan Help You Achieve Your Goals?
When it comes to personal finances, there are two different popular approaches people take. There are those individuals who have planned out their financial future, usually with the help of a financial advisor, and those who do not have a plan. For those individuals that do not have a plan, they usually have a vague sense that things will work out for them as long as they are able to save some money each month for retirement.
Unfortunately, without a financial plan, reaching your financial objectives might be far more difficult than expected because you don't know which target to work on next. Here’s how a financial plan can help you achieve your future financial goals.
A financial plan can help you establish a schedule for achieving your objectives
It assists you in focusing your money and time management on achieving your financial objectives so that you may accomplish the things you want to do in life. Your budget is a crucial aspect of your financial strategy.
You can plan how and when you want to spend your money according to your budget. It makes it easy to come up with new ways to pay down debt, save money and ensure your money is working for you. Your budget is the instrument you use to get there, while your financial plan is the path you take.
You must have specific goals in mind when developing a financial plan
The more precise the objectives, the better. If you want to retire early, for example, you'll need to decide what age you want to retire at and how much money you will need to save to get there. This aspect of your plan can be better outlined with the assistance of a financial advisor. They can assist you in determining the particular figures you will need to meet your retirement objectives. They can also determine how much you should invest each month and make recommendations for the kind of investments you should make to achieve your objectives.
A financial plan can also assist you in preparing for major life events
Saving for a downpayment on a home is not an easy task, it takes preparation and time. To best understand the type of home you are able to afford, you must first understand your finances. Similarly, saving money for your children's post secondary education is not as simple as just putting money aside or even worse dealing with it when they graduate high school, time and preparation is required. A financial plan can assist you in taking the necessary steps to care for your family and be ready for any major financial decisions that come your way.
Getting started with an effective financial plan is as simple as reaching out to one of our seasoned financial advisors. Give AWealth Financial Services a call today at (416) 666-7264, we will be happy to answer any questions.
5 Ways To Boost Your Retirement Plan
After years of labor, you definitely deserve the best rest in your retired years. However, like most things in life, you need to be prepared with a foolproof retirement plan. When you are retired, there is no paycheck date to plan your life around and you need to be as prepared as possible to cater for your needs and desires. Get the best out of your retirement plan and boost comfort for the rest of your life with these tips, and remember – the earlier you start, the better!
Set your financial goals
Every target requires setting goals and so does your retirement plan. Without a determined goal, you have no vision of what you want and can do little to nothing to ensure that you get there. Determine how much you will need for the retirement you desire and work towards obtaining that amount to enhance your retirement plan. It helps to also set financial goals to be achieved at milestones during your career.
Hire a financial advisor
If you want a stress-free retirement, you most certainly need a financial advisor. An experienced financial advisor is your go-to professional for management of finances, planning, investments, financial insights, and other money-related matters. By taking into consideration your financial retirement goals, a competent financial advisor will help you navigate and boost your finances in readiness for retirement.
Don’t spend it all
When you reach your set goal per week, month or even year, any extra money that comes in should not just be wasted. Be intentional about it. Channel that money into your overall savings. Think about it this way, the more you deposit your extra money, the faster you reach your retirement goal. And even better – the more provisions you have for your retirement.
Wait out your social security benefits
Waiting out social security benefits can be pretty tough but it has its long term perks. Every year you wait out your benefit, you increase the benefit you receive in the future, and this will definitely be beneficial for your retirement plan. Waiting after age 62 brings an increase in the value of your benefit so, if possible, wait till you’re 70 before you collect your benefits.
Take advantage of your 401(k)
401(k) is an extremely favorable retirement strategy which has two main types – traditional IRA and Roth IRA. With traditional IRA, you get to save for your retirement without paying taxes to Uncle Sam as it is removed before tax deductions. In Roth IRA, your payments are removed after tax but grows tax-free and withdrawals here are also tax-free.
With a great plan and the best financial advisor, you can enjoy the retirement of your dreams. Define your retirement plan today and enjoy the rewards of your labor tomorrow!
5 Reasons To Invest In Life Insurance
There are a ton of uncertainties that may occur from our daily lives. Unexpected occurrences are more likely to leave our loved ones in need of financial support. We daresay, that even before these situations occur, there’s a way to help out, by investing in life insurance! Depending on your age and family status,purchasing life insurance might seem like an unnecessary move, but you never know what is waiting for you around the corner. If you are looking for benefits to guide your investment decision on life insurance? We’ve got you covered. Here are five reasons investing in life insurance may be a good decision for you:
Caters to family needs
We all want the best life for our loved ones, and if you’re the primary income earner with dependents, you’ll always want to see them thrive. But what happens if the unexpected occurs? You can still support your loved ones with the sum total you have invested in your life insurance. This can help your loved ones cover funeral expenses, pay off the mortgage on your home or even cover your children’s full college tuition.
Provides generational safety
If you start your life insurance plan early, you might be able to provide financial protection for your next generation. This relieves the financial burden your kids or grandkids may face. With life insurance, you can easily leave an inheritance that offers them a spring board in life. As a result of your early life insurance investment, your grandkids can possess strong financial futures.
Peace of mind
Death may be inevitable, but with the right life insurance plan, it is always assuring to know that when you’re gone, your loved ones will be taken care of. A life insurance plan eliminates any mental stress or anxiety surrounding funeral expenses. Instead of worrying about what might happen if you die, you can invest in a life insurance plan that will help you prepare for any occurrence.
It is cost effective
Life Insurance is cost effective when you start early, which is why we advise you to start your life insurance plan now. If you do this when you’re younger and in better physical health, not only will the monthly rates be cheaper, the insurance coverage will also be higher. Existing health conditions might increase your plan costs, registering early helps avoid any potential health related fees.
Covers terminal diseases
Life Insurance covers terminal illnesses and provides financial security. Most types of life insurance plans come with perks or provisions. Some of these provisions come at an additional cost, but will cover instances such as injuries, terminal illnesses or accidents.
10 Financial Resolutions You Need to Make This Year
As the year is just getting started, many people are making their 2022 resolutions, what they would like to accomplish or change over the next twelve months. The most common resolutions revolve around health, careers and relationships, and not as often they revolve around financial decisions and goals. This can be seen as a costly mistake, as it is wise to plan and set goals, especially for your personal finances.
If you have yet to set your 2022 financial resolutions or maybe aren’t sure where to begin, we highlight 10 financial resolutions you need to make this year:
Learn from last year’s financial successes and failures
Last year, you probably made some good and bad financial decisions. Look through your financial records and the steps you took that affected your finances. Make sure you learn from your last year’s financial successes and failures.
Create a budget
One of the reasons people make bad financial decisions is that they don’t have a budget. So, creating a budget will help ensure that you don’t fall into this trap. Decide how much you want to spend on household expenses, transportation, childcare, loan repayment, body care, entertainment and so on and try to stick to it.
Save more
Basically, saving more this year is the cornerstone to financial freedom in 2022. You can do this by reducing unnecessary expenses, increasing your retirement contributions, boosting your income, and focusing on high-yield saving accounts. If you are not sure where to begin with saving or you have struggled with putting money away in the past, contact a financial advisor for assistance.
Automate your savings
If you have to decide how and when you should save money every time, chances are you may forget or forgo putting money away. Luckily, you can get rid of this issue by automating your savings. On a recurring schedule, you can have money debited from your daily account and moved to a savings account. This automation ensures money is put away and helps you to stick to your budget to cover your monthly expenses.
Improve your credit score
Do you know what your credit score is? Is your credit score lower than you would like? If yes, it is time you focused on boosting it. The higher your credit score, the higher your financial power. You can improve your credit score by repaying debts, paying bills before deadlines, and reducing spending.
Pay off your credit cards completely
The higher your credit card debt and the longer you continue paying the minimum fees, the more difficult your financial situation will be. Therefore, you should invest some time and money in paying off your credit card debt. This can make a significant difference in your finances. Credit card interest is painfully high.
Start an emergency fund
No one prays for emergency financial needs, but they happen every now and then. The emergency could come in the form of unanticipated car or home repairs or a layoff. Don’t just wish away emergency financial needs, start an emergency fund to take care of them. Your emergency fund sweet spot is being able to cover three to six months of your living expenses.
Invest more
Don’t just focus on saving and cutting your expenses, you need your money to grow and investing will help grow your finances. However, don’t rush into any investment; make sure you have a good understanding of it. Depending on your finances, a financial advisor or portfolio manager can help you to manage your investments.
Refinance your student loans and/or mortgage
Do you have a mortgage or student loan? You should think about refinancing them. With the interest rate reductions that we have experienced over the past 18 months, you should be able to save on your monthly interest charges.
Improve your financial literacy
If you know a lot about budgeting, money management, retirement, credit, debt, etc., it will be easier for you to make reasonable financial decisions. There are plenty of online resources that can help you to boost your financial literacy. Also, you can consult a financial advisor to learn more about how to manage your finances. Just make sure you are learning from a reputable source.
It’s time to set your financial goals for 2022 and make your financial resolutions. You can add additional resolutions to the above, or remove those that you don’t feel pertain to you. Make your resolutions based on your own needs and comfort levels.
Wishing you the financial best in 2022.
What Is the Best Age to Get Life Insurance?
The best age to purchase life insurance for yourself has been a subject of debate for quite some time. Most often the debates come down to paying a smaller premium amount for a longer time, versus paying a higher premium for a shorter time frame. The amount of your premium is affected by your age and your overall health. Knowing this, you think it may be possible to figure out the best age to get life insurance with a simple math equation to get the best price and maximum value or return on investment. However, everyone is different, and tomorrow is a relative unknown, so ultimately the best age to get life insurance is based on what you are comfortable with.
We already know that life insurance is highly influenced by age, so below we highlight the different age groups and some of the variables considered for life insurance policies.
1. Ages 20-39
This age range is among the best to get life insurance because the premium payable will be the lowest. If you go for a whole life insurance policy, your age range will give you the longest time possible to build cash value, as your life expectancy is the longest in this age group.
2. Ages 40-59
This age range is among the most popular age ranges that people believe that they should have life insurance. However, in this age bracket premiums have already begun to increase and some individuals may even give up on the idea of a life insurance policy for themselves as they do not believe they can fit the added expense into their budget. Even though premiums are higher in this age group, than the previous bracket, you should also consider that you have not been paying into the premiums previously, so the money that you have not been spending over the years, is being made up in a way now, with the slightly higher premiums.
3. Ages 60 and Above
At this age range, you can expect to pay the highest premiums if you are just now opting into a life insurance policy. This is because at 60+ the chances of life changing illness or even death are higher than any of the other age groups. Some insurance companies may even refuse to offer insurance to individuals in this age bracket, or may ask for frequent medical exams for continued eligibility.
Ultimately the best age for you to get life insurance is based on what you are comfortable with. However, signing up for life insurance at a younger age will provide the lowest premium rates and also provide coverage in case of an unexpected illness and accident. As you reach certain milestone events in your life such as getting married, purchasing a home or having children, the importance of life insurance increases as you want to ensure your loved ones are financially protected. It is never too late to get a life insurance policy to protect your family and loved ones, you may just need to take a few extra steps, including medical exams and pay a higher premium for your coverage.
5 Tips to Plan Out Your Financial Goals in A Smart Way
Our financial advisors say that everyone should consider planning for their financial goals no matter what stage of their life they are in. Financial planning is important because it can help you proficiently manage your finances. But, how do you set up your financial goals in a way that will benefit you down the road? Well, if you’re asking yourself this question, you’re in the right place. Our experts share their 5 tips to plan out your financial goals in a smart way. Let’s see what’s they had to say!
#1 Think About your Goals
The first thing you can do to plan out your financial goals in a smart way is actually to think about what your goals are. This will help you create a financial plan and understand your long-term needs and expectations. It is essential to consider both short-term and long-term goals. Our financial advisors recommend writing down a list with all your financial goals. This will offer a better view of your needs and expectations for both the near future and not so near future.
#2 Start Prioritizing
After you have your list ready, you can move on to our next professional tip, which is to plan your finances. At this point, you should prioritize and focus on your financial needs and wants. For example, if you are planning on paying off credit card debt and saving for your retirement, both items can’t be achieved right away. This is where prioritizing comes in. Inspect your list and number your goals depending on your true interests. It can be helpful to discuss your goal priorities with a financial advisor.
#3 Set up a realistic budget
Another tip for planning out your financial goals in a smart way is to create a realistic budget. A budget outlines both your money coming in and your expenses (money going out). Most people consider their regular monthly expenses but ignore annual or quarterly expenses. Ensure you include insurance, property taxes, and fuel. A budget will help you prioritize how your expenses.
#4 Consider Automated Saving
Once you have noted your expenses, you can better understand how much income you have left for savings or miscellaneous expenses. An easy way to save money is to have a portion of your earnings automatically moved to a savings account.
#5 Check Your Progress
It isn’t enough to plan out your financials, you need to act and check in on your progress to ensure everything is moving according to your plan. Financial planning is fluid as your goals may change. Start with your base plan and review and update as needed.
If you’re not currently collaborating with a financial advisor, it might be a good idea to schedule an annual review consultation. This is an excellent approach to sit down and check your goals and budget. A financial advisor can help you adjust your plan and guide you towards the best way to achieve your goals.
What Are the Key Benefits of Life Insurance Plans?
Life insurance assures you that your family will be financially stable after you are gone. It is a financial strategy to cater to your family's needs after you pass away. Although the most common information about life insurance is about covering funeral expenses after your demise, there are other key benefits of life insurance plans that are not known by many people. Read further to learn more about how you can maximize the benefits offered by life insurance plans.
Below are the key benefits of life insurance plans:
1. Income Replacement and Settlement of Debts
Life insurance benefits can be used to replace your income when you pass away. The money could be used to pay off expenses, such as your mortgage and the college tuition for your children. Additionally, other debts such as car loans and credit card bills can also be settled from your life insurance benefits. Your family will not be put under financial pressure to pay off debts and cover mandatory expenses if you had a life insurance policy that covers these items.
2. Inheritance
Another key benefit of life insurance is that it can be left as an inheritance to loved ones. Instead of leaving assets, you can invest in a life insurance plan and choose a specific person to receive the benefits as an inheritance. Given this, you must name the chosen heir or heirs as the beneficiary on your policy. This will ensure that the benefits go to the right person or people.
3. Caring for Aging Parents
If you have aging parents who depend on you for their day-to-day expenses or personal support, the best way to secure their financial independence, in case you pass away before them, is to buy a life insurance plan and name them as the beneficiaries. This will ensure that your parents have a lifeline to cater to their needs if you pass away.
4. Tax Payment
After receiving an inheritance, some regions have tax laws that mandate the heirs need to pay an estate tax after receiving the life insurance benefits. Because of this, the taxes can be paid from the insurance benefits. However, you should contact your financial advisor and insurance provider to verify and know what impact estate taxes may have on your beneficiaries.
5. Final Expenses Payment
When you pass away, all the final expenses will be paid from your life insurance benefits. Hospital bills, funeral, and burial or cremation costs will be taken care of from the life insurance benefits.
The above are some of the key benefits of having life insurance, however, not all policies offer the same coverage and options. If you want your family or loved ones to be free from financial burdens after passing away, speak with a life insurance professional to better understand your options.
Does changing your job affect your mortgage application?
Looking to apply for a mortgage but thinking of changing your job? A job transition is common and not a deal-breaker for your mortgage. You can get a mortgage between jobs by applying for an offer letter mortgage. Most of the time, to be approved for a mortgage, you need the income that’s stable, reliable, and likely to continue for at least 3 years. And with regards to new jobs, you’d have to be making an upward or at least a lateral move within the same industry.
How important is your job when applying for a mortgage?
It is a no-brainer that your job is very crucial to your mortgage application. The reason is that you need to state your profession, who your employer is and how long you have been working with the employer.
Lenders need to know this information to determine the level of the security of your finances before approving the mortgage loan. Your qualification for a mortgage will not be based only on the length of employment. The mortgage lenders will also consider your income, credit history, and age.
When does your job affect your mortgage application?
Your job has a direct effect on your mortgage application in the following ways:
1. Nature of Job
It is crucial to know that your job or career has a significant impact on your mortgage application. If your job is more stable or high in demand, it will increase your chances.
2. A New Job
If you just got a new job, lenders would assume that you are on probation period. This means you may be out of work anytime, leaving you without a source of income. In this case, your mortgage application may not be approved because many mortgage lenders do not accept applications from people who just started working at a new company.
As a result, changing your job will affect your application. However, there are twists to this condition based on some factors like when the new job offers a higher salary. In this case, it is possible to be offered a higher amount of money to borrow, if your job is considered stable by the lender.
Changing Your Job Versus Getting a Mortgage
If you have secured a mortgage and started making money repayments, you may not tell your lender about the change of job or that you have been made redundant, as long as you can meet up with the monthly repayments. However, if you can’t keep up with the monthly repayments, you must inform the mortgage provider.
If you are optimistic that you will get a new job and earn a higher salary, get the job and wait for the probationary period to be over before applying for a mortgage. On the contrary, if you are not sure that changing your job will give you a higher income, secure the mortgage first before changing your job.
Request Professional Advice from a Mortgage Broker
If you are considering changing your job and getting a mortgage at the same time, seek professional advice from a mortgage broker. The mortgage broker can help you find a provider that will be suitable for you. However, do not be too eager to act. Consider the existing factors and your chances before making a final move.
5 Crucial Financial Moves to Make Before You Get Married
Choosing to get married is one of the biggest decisions you will ever make. However, it’s important to consider your financial situation before you get married to ensure you and your partner are on the same page. As you start preparing to get married, here are 5 crucial financial moves you should make:
Understand each other’s current financial situation
Before getting married, it is crucial to understand the current financial situation of your partner. Similarly, your partner should know yours too. Some of the things you should know about each other’s current financial situation include:
- Current income
- Existing debts
- Total assets
- Opinions about utilizing credit cards
By having an understanding of each other’s financial situation you can be fully aware of any financial challenges you and your partner may face.
Go for a prenuptial agreement
When individuals get married they never intend to get divorced. But sometimes things happen, problems arise and divorce may become necessary. This is why it is always best to consider having a prenuptial agreement before getting married. A prenup is a written agreement about how properties and earnings will be shared after a divorce. It can prevent your divorce from becoming even messier. If you and your partner are considering having a prenup you should always consult a financial advisor.
Consider a joint budget for the wedding
Many individuals start having financial issues before their marriage even begins. In fact, many couples get into disagreements during wedding planning and coming up with an appropriate budget. So, if you plan to have a wedding ceremony, you should have a joint budget for it. In other words, both parties should contribute to the ceremony. Additionally, you should be mindful of how much you spend on the ceremony by making sure you don’t go over your agreed-upon budget.
Have a money management style
In a marriage, one person is usually better at managing the finances than the other. However, you shouldn’t assume the better money manager. Both of you should discuss the issue and consider past experiences when establishing your money management style. Regardless of which person chooses to manage the finances, the other person should still be informed about the situation. In other words, you should plan to have regular discussions about your finances. This ensures that you have open communication and transparency with one another.
Consult a tax professional to discuss your tax differences
By filing your taxes together you can improve your finances. However, you need to be careful as taxes can be quite complicated. Given this, you should consult a tax professional to discuss the differences in your taxes.
Takeaway
It’s always good to be well informed about your partner’s financial situation before you get married. If you and your partner want to know more about financial literacy, talk to a financial advisor today for expert advice!