But now I’ve got a dilemma-what to do with the money. Because I’m currently not working full-time, I’ve got some options for the money. I had previously blogged that I was going to split it into thirds and send the money into debt repayment, emergency fund, and something else (hadn’t figured out what to do with that final third.) These are good option, however I have since changed my mind, mainly because of course I’ve only made $5 as a freelancer so far.

So my options are:

1. Move the money into one of my Lines of Credit. This has the benefit of giving me immediate access to the money, as well as saving me money on the interest I’m being charged, since it’s calculated daily.
2. Move it into my Citizen’s Bank Global Chequing Account. This also gives me the benefit of immediate access to the money, but also earns me a bit of interest on it.
3. Move into my emergency fund. This will replenish what I’ve taken out, plus earn me more interest than Option 2.
4. Pay off the Visa card. Okay, the refund wouldn’t pay it all off, but it would take care of about 57% of that card’s balance, which of course would save me money on the interest.
5. Pay off the MasterCard. Again, this doesn’t cover the entire amount, but it would take care of 38% of the balance, and save me money on the interest.

My main hesitation on moving the  money to either credit card is simply the fact that if I need access to the money for something like rent, I can’t get to it. And since the refund amount wouldn’t clear the entire balance, I couldn’t really use it for living expenses either, you know?

For the time being, I’ve just moved it to the TD Line of Credit so I at least save on the interest, but I’m not entirely convinced I want to just leave it there, you know?

What are your thoughts? Which option do you vote for?

This is an official post from Adventures in Debt.

The Canadian government has created a handy website that can help Canadians figure out which tax credits you can apply for. Go here to check it out.

They’ve broken up the tips into categories: a taxpayer, a parent, a person with a disability, a senior, a student, or a tradesperson. This is helpful since you just need to click the appropriate category, and you’ll see tax credits and tips that will apply to you. If you’re looking for some tips and help on your 2008 tax return, I recommend you check out the Canada Revenue Agency’s website.

How many of you go and have your taxes done by a professional? Some place like H&R Block? Did you know that you’ve got several online options as well? Remember that not everyone can submit their taxes online, so you’ll have to check the paper work CCRA sent you a few months ago to see if you qualified. Since my return is fairly simple (income, savings accounts, and RRSP contributions), I am eligible. Don’t forget that if you file online, you’ve got to keep your tax slips handy, because the government might want to take a look at them. They asked me for my T4s last year after I filed online, which delayed my return by a few days, but nothing that I couldn’t handle. It’s good practice to keep your slips and any other tax information for 7 years, just in case.

This year I’m excited to do my taxes because I know I’m going to be getting a good refund. How do I know this already? Well, firstly, I changed jobs, which always means I over contribute to EI and CPP. It’s annoying that I don’t earn any interest on that money, but at least they give it back to me. PLUS, I also made RRSP contributions this through my group RRSP at work, so that also has the added bonus of lowering my income (and reducing my taxable amount), AND ensures I get more of a refund back from the government.

And while my refund is going to be a hefty amount, I’m not going to do the “usual” and spend it all. I’ll be putting 1/3 towards debt repayment, 1/3 towards my emergency fund, and I haven’t decided what to do with the other 1/3. I  might also put that towards my debt repayment, but I also might just put it towards my travel fund, since I will be doing some travelling over the next 12 months, and I’ll need the money. In fact, that last 1/3 might actually just top up my Italy fund, now that I think about it. Hmm, I should look into that.

At this point I’ve only just done a draft of my taxes, as I am waiting for one more RRSP contribution slip (my 60-days of contributions in 2009 slip.) I didn’t actually contribute a lot more in these first 60 days of 2009, but every little bit helps, right? For all of you non-Canadians out there, we’re able to claim not only any RRSP contributions we made during the appropriate tax year (2008 in this case), but also any made in the first 60-days of the following year (Jan-Feb of 2009.)

I’ll post again later on what service I’m using for my tax return. Are you all getting ready for the tax man? How ready are you?

This is an official post from Adventures in Debt.

GULP

I don’t know about you, but I always get nervous whenever the government asks for “proof” of anything, whether that’s at a border crossing and they ask for my passport, or when someone asks to see my photo I.D. But this, this could be extremely nerve-wracking!

But since I knew that the real reason they were asking for the proof was that I had made more last year than the previous year, what with my raise, my severance pay and my new job, I knew I would be all right. And sure enough, I was!

How was I all right?

I actually got my income tax return last Thursday. Yes, for one glorious day, my bank account was doing the Happy, Happy, Joy, Joy song. The planets even aligned last week so that I had both my income tax return AND my bi-weekly pay deposited into my account on the same day. Oh, it was a heady time, seeing all those numbers in my chequing account. I admit that I left all the money in my account for a day just to see all those numbers.

Of course reality set in the next day when I had to disperse all the money:

1.  10% went into my fun money savings account (either my travel fund, or my new tv fund, I haven’t decided yet.)
2. 90% went into my debt repayment, divided up between a couple of the accounts.

How are you going to use your income tax refund (if you’re getting one)? Are you going to be bad and spend it on something frivolous that you haven’t been able to buy? Or are you being responsible and paying off some of your debt?

This is an official post from Adventures in Debt.

Of course the thing I am looking forward to is this: because I changed jobs last year, that means I will have overpaid all the various taxes withheld from my paycheck, which means the government owes me money! So my refund will be better than previous years, especially because I did not make any RRSP contributions last year (I figured it was better to pay down my debt rather than contribute to retirement savings.) I will definitely be starting up the contributions again after March 1st, because:

1. I want to make sure I have enough money to retire on.
2. I want to reduce my taxable income amount.

I will be taking any refund I get this year and dividing it in two: half to my RRSP, and half to my debt repayment. A good compromise, don’t you think?

I just got my last T4 slip today at work as well, so I’ll be able to do my taxes this weekend and get them in super early. Of course I won’t do that, as I don’t want to be too much of a keener. I will let everything marinate & percolate for a few weeks and then do them. Besides, I have a busy weekend planned out, so I don’t think there will be time to do them anyways.

This is an official post from Adventures in Debt.