Debt

Using Home Equity as a Piggy Bank

Home Equity as a Piggy Bank?

As mentioned in my previous articles on Debt, historically low interest rates have fueled an unprecedented increase in personal borrowing and household debt. One significant component of this debt is real estate mortgages and debt secured by real estate. To make matters worse, many people make poor decisions regarding the use of equity.

Equity in your home is the difference between its market value and the balance on any mortgage. Once home equity is accumulated, there are several ways to use it to your advantage...

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Income Tax and Self-Employment

IncomeTax

As stated in my related article “3 Main Components of a Basic Tax Return”, if you are reporting income from self-employment in Canada, you must provide an income and expense statement which contains your total income for the year, a breakdown of operating expenses, and your net income or loss.

This article is directed to owners of small businesses and provides information about the income and expense statement and business operating expenses.

This information and additional details can be found in the Canada Revenue Agency (CRA) information booklet entitled “Business and Professional Incom...

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3 Main Components of a Basic Tax Return

Calculator

The basic tax return can be broken down into three main components: income, deductions from income, and non-refundable tax credits.

1. Income

You must report your income from all sources including: employment, Old Age Security (OAS), Canada Pension Plan (CPP) or Quebec Pension Plan (QPP), other pensions, universal child care benefit, Employment Insurance (EI), dividends, interest, capital gains, self-employment, rental and any other income that is deemed “taxable”...

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How to Reduce Your Debt

Cutting Expenses to Reduce Your Debt

As mentioned in the Article Debt: The Good, the Bad and the Ugly, consumers themselves must be very concerned about their spending and borrowing. They should be aware of the risks involved with rising interest rates, extended periods of financing, using your home as a piggy bank and maxed out balances when obtaining real estate mortgages, car loans and leases, lines of credit (LOC’s) and credit cards.

The Solution to Personal Debt

The solution is obvious and simple, but it is not easy for some...

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Debt: The Good, the Bad and the Ugly

Debt and how to Get out of Debt

There have been many news articles in recent months highlighting the concerns of federal government finance officials regarding Canadian household debt and the increase in the debt to income ratio to record breaking levels. This ratio currently stands at 165 % which means that the average Canadian household now owes $165.00 for every $100.00 of disposable income. This article will address the following questions which must be asked:

How Has This Situation Developed?

Household debt has increased substantially and rapidly in Canada and many other countries...

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