Tax season is now officially on. We are ready for you…are you ready? Last weekend, Nibia and I attended the Black Physicians Association of Ontario (BPAO) annual symposium in Downtown Toronto. It was great to meet new faces and to reconnect with clients and other partners in Black health. I’m always blown away by the great presentations at this event as I get to learn about new advancement in medical research. In this issue, I discuss personal taxes, invite you to a webinar on how to build tax-efficient wealth, as well as other useful insights. Enjoy this issue and please remember to share this with everyone in your network:
- Are You Ready To File Your Personal Tax Returns?
In the recent survey I completed on personal income taxes, 47% of you said you will be filing your taxes yourself, while another 24% plan to use a friend to help file their taxes. As technology continues to improve, we believe that this trend will continue to grow in the coming years. The truth is that filing personal taxes is not the hard part. What may be challenging is getting the appropriate insights from your tax returns that will enable you plan better going forward. As you file your tax returns this year, here are some questions to consider:
- What’s the dollar amount I paid in taxes?
- What’s my average tax rate?
- What’s my marginal tax rate?
- Why did I get a refund? Why did I NOT get a refund?
And when you have answers to these questions following the filing of your tax returns, you want to consider your next action steps. For example, what steps can you take in 2024 to pay less taxes than you did in 2023? This is where insights come in handy. As I’ve said many times, when you don’t get insights, you end up paying more in taxes than you’re required to and a dollar lost in taxes today will not only cost you a dollar today, IT WILL COST YOU A MULTIPLE OF THAT DOLLAR OVER TIME!
If you’re looking for INSIGHTS to help you minimize taxes, then consider the Personal Tax Services we offer. With our services, we can help you minimize taxes, improve cash flow and get ahead financially. Get the details here.
- Steps To Build Tax-Efficient Wealth Webinar
I’m excited to announce that on Thursday next week, I will be hosting a special webinar to reveal a 6-step framework to build tax-efficient wealth. This framework is simple and easy to implement and it will enable you to minimize taxes and accelerate your cash flow and wealth. This is a short 30-minute LIVE Zoom webinar on Thursday, March 7, 2024 at 6 PM Sharp! For more details and to register, click here. I look forward to seeing you at the webinar.
- Three Ways to Avoid the Mistake of Growing Your Expenses as Your Income Grows
I clearly recall when I immigrated to Canada to join my wife. As new Canadians, we started with no income. As I recall at the time, our rent of a bachelor’s apartment was less than $500 per month. Then we started doing menial jobs, earning approximately $7 per hour working part-time. In a good week, we may get a combined 20 to 25 hours of work, enough to take care of the rent and some food. At the end of the month, we had no disposable income.
When we relocated to Toronto, there was more work at a higher rate of approximately $10 per hour. In a good week, I will get 20 to 40 hours of work. We upgraded and lived in a 3-bedroom apartment building that was shared with two other people. This was a wise move as it kept our rent at approximately $600 per month. At this point, we had more income. Rent was still relatively low but the cost of living was higher in a big city like Toronto. So at the end of the month, we still had no disposable income.
Our next move was to a 2 bedroom apartment that we also shared. Shortly after that, we moved to a spacious 1 bedroom basement unit. Rent was $1,000 but at this point, we both had full-time jobs with a combined income of approximately $75,000. We bought new furniture to fill the space in our new home. We had a car to maintain. Travel costs to and from work increased. We bought new clothes to match our new income level. We hosted house parties to impress friends. We had student debt to pay. At the end of the month, we had no disposable income.
Then we made the first big move a year later by buying our first home. We now had a fully detached 4-bedroom home on a combined income of approximately $100,000. Our expenses more than doubled with mortgage payment, property taxes, utilities, home maintenance, etc. Then came children and more expenses on childcare costs, food, children’s activities, travel, birthday parties, etc. At the end of the month, we had no disposable income. Nine years later, we upgraded to a slightly bigger 4-bedroom home in a better neighborhood. In general, expenses were higher, income continued to increase and we still had no disposable income at the end of the month.
This is a pattern that we are all familiar with. We regularly see our friends and colleagues upgrade their standards of living as they earn a higher income.
But, the more money you make, the same problems you have.
For me, it was constantly living from paycheck to paycheck.
It is called Lifestyle inflation.
Read the full article here and learn the three ways to combat this. Enjoy.
- Why More Money Will Not Solve Your Money Problems
Not too long ago, in an email shared by Rob Minton, one of my mentors, he concluded that…
Money problems ALWAYS flow from thinking problems.
I thought this was an interesting conclusion as it directly relates to our money mindset. Rob goes on to share how we see this in real life by studying lottery winners. Within a short period of time, they go from money problems to having lots of money and then to having money problems again.
So, more money usually doesn’t solve money problems. To solve money problems you have to change how you think about money. This comes down to your money mindset, which is the subconscious feelings and thoughts we develop towards money from our life experiences. A money mindset is your unique and individual set of core beliefs about money and how money works in the world. It is your overriding attitude about money. It shapes what you believe you can and cannot do with money, how much money you believe you’re allowed, entitled, and able to earn, how much you can and should spend, the way you utilize debt, how much money you give away, and your ability to invest with confidence and success. When it comes to money mindset, there are two extremes:
- The Scarcity Mindset, which will keep you stressed, anxious, and can result in a lack of generosity; and
- The Abundance mindset, that can keep you calm, positive, optimistic and more generous with your money
Most of us will fall in between these two extremes. It is important to know where you stand and to begin to work to develop the right money mindset. You can use this FREE resource to take a 2-minute money mindset test to give you a sense of your current mindset when it comes to money. So far, 44% of those that have taken this test have an abundant money mindset. What about you? Take the test here.
- Do You Own A Corporation With A December 31 Year-end?
As some of you may know, we provide a number of services for corporate clients and it’s that time of the year when corporations with a December year-end should start organizing their documents to compile their financial results, estimate taxes, plan their cash flow for the new year and several other things. While we obviously help corporations with the tax compliance work of filing their annual corporate tax returns, we do provide other additional value-added services such as:
- Streamlining and automating the majority of your bookkeeping processes
- Doing a cash flow and budget analysis for your corporation
- Estimating corporate tax liability and developing a plan for installment payment of your taxes
- Corporate tax planning including how to invest corporate dollars and how to properly use insurance within your business to mitigate risk and plan for retirement
- Corporate restructuring to ensure you’re organized in the most tax-efficient way
- Remuneration planning to ensure you’re taking money out of your corporation in the most tax-efficient manner
- How to use your corporation as a nest egg for your retirement in a tax-efficient manner.
- And many more…
If you’re looking for solutions for your corporation consider working with me and my team at GMS Professional Corporation. Check out our standard service offering for corporations here. And when you’re ready to have a chat, book a time with me here.