It’s tax time! Hopefully, you’re getting ready to file your taxes, awaiting your tax package from the Canadian Revenue Agency and organizing your supporting documentation. You should receive your tax package, based on the province or territory in which you resided on December 31, sometime in January.
Each CRA tax package should contain the following:
Your tax return form
Your federal tax worksheet
The forms for any schedules you require
Provincial or territory tax worksheet
If you don’t have a tax package by the end of January, or if you have the wrong one (the CRA will usually just send you a package based on the way you file your taxes the previous year), you should make an effort to get your hands on one. You can download and print the right package for you from the CRA web site, request a mailed package using the Internet, order a tax package by calling 1-800-959-2221, or go to a postal outlet or Service Canada office and pick up a package in person.
Keep an Eye Out for Tax Slips from Others
As the end of February approaches, you should receive slips with tax information. Employers, payers, plan administrators and others will be sending you relevant information (it will go to the CRA as well). Your T4 slips include information about your income, pension plans, old age security income, benefits, insurance and other income. You might also receive T3 slips providing information about trust income that you need to file your taxes.
When you receive this information, keep it together, and somewhere safe. Set up a folder so that you know right where this information is, and so that it is easily accessible as you prepare your taxes. Understand which slips belong with which returns (you might need a separate return if you have a business), and organize your slips as they come in. Also, be aware of the organizations and people that might be sending slips. If an expected slip doesn’t come in, contact someone to find out where the slip is.
Organizing Your Paperwork to File Your Taxes
While you wait for your slips to come in, it might be a good idea to organize what paperwork you can. Collect relevant receipts and other documentation that you need in order to qualify for tax deductions and tax credits. Without documentation, you might be unable to reduce your tax liability. Keep documentation for tax breaks together, and when your slips come in, place them with the appropriate documentation. That way, the process of filing your taxes will go smoother.
Even if you have someone else prepare your taxes, you should try to organize your paperwork as much as you can. Call ahead of time to make an appointment so that you can get in, and ask what you need to bring to your appointment. Many accountants can provide you with a checklist of what to bring to your appointment when you file your taxes. Even if you don’t use an accountant to prepare your taxes, you can still ask for a checklist. The CRA also has a helpful checklist of items that you need for your tax return.
Start now, and prepare a little bit at a time, and you will be ready to properly file your taxes when the time comes — with as little fuss as possible.
Any other suggestions for when you file your taxes?
After posting my Best Reads of 2011 post, and getting some good feedback from it, I decided to re-work how I track articles and sites I follow. Basically I am going to assign points: 1 for each of the first 10-15 in this list, 2 points for the Editor Picks and 3 points for the EDITOR CHOICE article. The results of my quirky desire to rank things will be published next year. Stick around our site and you’ll enjoy the results.
So January wasn’t hot per se but it sure hasn’t been cold as we are accustomed in Canada for this winter month. Usually we’re dealing with frigid temperatures and snowfalls that exceed 1 foot on a regular basis. Not this year. So the reason I mention the month being “hot” is that there were so many great articles over the last month. I had over 30 on my list and spent far too much time reviewing them and trying to whittle down the list. So instead of 10 articles to start i’ll use 15 this month. And i’m saving the other 13 that didn’t make it into my favourite reads for other months if so needed.
I can’t believe how expensive textbooks are. American’s don’t realize that Canadians, on average, pay 20-30% more for everything, including textbooks, than they do. This is a primary driver behind our desire to participate in cross border shopping. As a result, that $150 dollar book ends up costing around $200 north of the border! Outrageous.
Back when I was in school in the mid/late 90s, I was spending $700 per year for textbooks – about $350 per semester. That was for 5 courses, so about $70 per semester textbook and upward of $150 for a full year text book. Since I got a Bachelor of Arts in political science and sociology, I often had 15 or more books in a year. Given inflation, I can imagine that students are spending over $1,000 per year on textbooks, especially if you are in a major, like science, where books are so expensive.
How Textbook Rental Saves Money
I wish I had textbook rental when I was in school. Since I only used my book for one class, then sold it back (at 20% of the purchase price, if I was lucky). it would have been so much more beneficial if I could rent my books instead. Now, companies like eCampus are renting them out for the quarter, and providing savings in the process. The campus book store sure had quite a racket set up: sell over priced books, buy them back at a steep discount and then re-sell them for a tidy profit. Lather, rinse, repeat.
I was checking out eCampus to find used books online, and I was in shock by the savings I saw for renting textbooks. For many books, the savings for renting was maybe 50% of the cost of a new book, and 30% less than even a used book. That is some great savings. For example, there was is a Principles of Physics textbook, pretty standard, that sells for $214 new and $150 used. It rents for $54 for the semester (even cheaper if you rent for the quarter). Huge savings!
Another great feature is that shipping is free both ways on orders over $59. They send you the book, and provide you a shipping label to send it back at the end of the semester. This will save you a lot of money if you order many books at once. I know I used to buy my textbooks all at once so this is a feature I would definitely take advantage of.
Finally, many books are now coming out in eTextbook, which offer even more savings. You can save 90% compared to the cost of a new textbook. If I had this while I was in school, I would have been paying $70 per year instead of $700 – very worth it in my opinion.
Some traders trade without a stop loss, some investors invest without a stop loss. A stop loss offers extra protection against loss, but some people just like to live life on the edge. However, using a protective stop can help you safeguard your portfolio against unnecessary loss. Are you familiar with the use of protective order types?
What is a Stop Loss?
A stop loss is an order type. A buy or a sell are also order types. When you first place your stock order, you have a few options. You can choose to place a market order which is possible and will only execute when the market is open. That order will execute at the market price. You do not have control over the price at which your order gets filled. You can place a buy or sell order that can be executed even if the market is not open, limit orders are usually used for this. A stop order is an order that can be executed even if the market is closed. If you are long, or on the buy side of the trade, a stop would be placed under the current price at some point of loss in case the price drops down. If you are on the sell side of a trade, you would set the stop somewhere above the current trading price.
Why Do I Need a Stop Loss?
If you are actively managing your own portfolio you will need to be familiar with a stop loss. Even if you plan a buy and hold strategy, it is good to know how to use a stop loss in the event of unexpected market volatility. A stop order can protect your portfolio on the downside and prevent unnecessary losses.
Where Should I Set My Stop Loss?
This is the biggest question that is asked when stop losses are discussed. It really depends on what you are willing to lose and how you view the trade. Is this a buy and hold? You may be ok with setting the stop loss to a 50% loss or maybe 70%. Are you testing a strategy or making a short term trade? You may want to set your loss at only 10 to 15% of the trade value. Whatever you decide you should make sure to set the trade as ‘good til canceled’ and not just good for the day. That way your stop will only expire when it is canceled by the exchange, typically in 30 days or within a calendar month.
Advanced Method: Trailing Stop Techniques
There are other ways to set stop losses that can prevent a huge loss but also lock in current gains. A trailing stop is a stop that moves as your position gains in value. Think of it as a spy who follows you as you are walking in the park but each time you stop and look back, he hides behind a tree. If you walk backward, he’ll eventually catch you because he never walks back. A trailing stop is basically the same. As your trade wins, the stop will move up protecting you in case the price drops to the stop level; however, if the price keeps going up, the trailing stop keeps going up. If the price continues to rally, eventually the stop will cut you out of the position at a gain. These type of orders are really good to use if you are not planning on actively trading.
A stop loss can be beneficial to you if you are a buy and hold investor or a trader. Do you use a stop loss when you are planning to exit a trade?
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