Tax Tips & Advice, TurboTax

One Way to Split Income With Your Spouse: A Spousal Loan

No Comments 30 May 2014

Income-Splitting---Spousal-LoanThe Canada Revenue Agency does not encourage income splitting. In fact, they have specific policies against it, such as the Attribution Rules, meant to enforce the idea that whoever earns the income pays the tax on the income.

Simply stated, the Attribution Rules say that when you transfer or loan property to your spouse (or to a trust in which your spouse has a beneficial interest), any income or loss from that property is deemed to be yours for a taxation year – effectively preventing you from splitting your income with your spouse by giving them money.

(You can read the details about the Attribution Rules in the Canada Revenue Agency’s  IT511R – Interspousal and Certain Other Transfers and Loans of Property.)

However, one way you can split your income with your spouse is to loan them money to purchase property from you or to purchase an income producing investment such as stocks, bonds or mutual funds.

What You Have to Do to Use This Strategy Effectively

1) Make sure the loan is properly documented just like any other loan, and includes repayment terms.

2) Charge interest that’s at least equal to the Canada Revenue Agency’s prescribed rate. Currently this interest rate is one percent! This rate may be locked in until the loan is paid.

3) Make sure the lower-income spouse who receives the loan pays the interest that is due on the loan every year or within 30 days of the end of the year.  A missed payment will cause the Attribution Rules to kick in and the income generated by the lent money to be attributed back to the higher-earning spouse who lent the money that year and in all future years.

How Spousal Loans Work Tax-Wise

For you to end up with a lower overall tax bill between the two of you, the money you lend your spouse has to make a return greater than the prescribed rate – and you have a really good chance of your investment doing this with a prescribed rate as low as it is.

And there is no requirement to pay back the principal, only the interest.

The lending spouse has to include the interest as income on his tax return but if the loan was used to purchase income-producing investments such as stocks, the spouse who received the loan will get to deduct the interest paid on theirs.

Small Business, Tax Tips & Advice, TurboTax

You May Have Business Income and Not Even Know It!

No Comments 27 May 2014

You May Have Business Income and Not Even Know It!

shutterstock_115232341How can this be?

Well, any activity that you do for profit is business income, according to the Canada Revenue Agency.

So if you’ve sold a few items on eBay or Etsy or set up a table at your local outdoor market and sold things, you have been engaging in business and have business income that you must declare on your business income tax.

You see, it doesn’t matter that you haven’t made much money. The Canada Revenue Agency does not set any dollar value in its definition. So technically, you could make 25 cents and that would be business income.

It also doesn’t matter that you have not been “officially” operating a small business. You do not have to take any action at all other than engaging in an activity for profit to be considered to be in business.

You don’t have to have invoiced anyone or registered a business name or taken out a business license. In fact, in all Canadian provinces and territories, you are considered to be operating a sole proprietorship, doing business in your own name as an individual business owner, without even touching a form of any kind.

(Sole proprietorships that want to use any other name except the business owner’s legal name and all other forms of business in Canada, such as partnerships or corporations, do need to federally and/or provincially register their names; for more information, see the CRA’s website  for more information.)

So the bad news is that you have to declare all your income on your income tax return, including your business income, even if the business income doesn’t amount to much or if you’re not actually “officially” running a business.

If you fail to report all your income, you may be subject to a penalty of 10% of the amount you failed to report after your first omission, and, “if you knowingly or under circumstances amounting to gross negligence participate in the making of a false statement or omission on your income tax return” (Canada Revenue Agency), the penalty is 50%of the tax attributable to the omission or false statement (with a minimum penalty of $100).

The good news is that having business income makes you eligible to claim business expenses. See our blog article on eligible business expenses so that you can save more on your taxes.

Tax Tips & Advice, TurboTax, Uncategorized

What to Do if You Made Money on Both Sides of the Border

No Comments 19 April 2014

USA CanadaDid you make money in both Canada and the U.S. last year and are wondering how that will affect your income tax?

The answer depends on what kind of income the money you made is and whether or not you’ve already paid tax on it.

As a Canadian resident, you’re taxed on your world-wide income. And Canada has tax treaties with many countries to ensure that Canadians are not “double-taxed” for the same income that they earn in other countries.

Theoretically, therefore, you just pay tax in Canada for all of your worldwide earnings. In practice, though, it’s not quite so simple. Here’s the lowdown:

The simplest case: business income paid to a resident Canadian – If you have provided a product or service to a customer in the U.S., all you have to do tax-wise is convert the money into Canadian funds (the Canada Revenue Agency (CRA) says that you should use the Bank of Canada exchange rate that was in effect on the day you received the income to do this), and the money becomes part of your business income.

It’s not so simple if you were resident in the U.S. when you made the business income; then, as a contractor, you will have to file a W8 with your client (a tax form for the IRS) and may have to file an American as well as a Canadian tax return.

Foreign employment income – Having foreign employment income is also fairly simple to deal with. Your American employer will provide you with a W-2 (the equivalent of a T4 slip). You will convert the money into Canadian funds (using the Bank of Canada exchange rate that was in effect on the day you received the income to do this) and then enter your foreign employment income in Canadian dollars on line 104 of your T1 personal tax return.

If tax has been withheld, don’t reduce your foreign income by that amount. Instead, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes.

Also look to see if the amount on your W-2 slip has been reduced by contributions to a “401(k), 457 or 403(b) plan, US Medicare and Federal Insurance Contributions Act (FICA),” because if so, you have to add these contributions to your foreign employment income on line 104 on your Canadian return. These contributions may be deductible though.

Rental income from a property in the U.S.  requires some forethought and tax planning because you want to handle the income in the most beneficial way to your personal tax situation.

Tax-wise, you are a Canadian resident for Canadian income tax purposes and a nonresident alien for U.S. tax purposes. Because of this, the person paying the rent is obliged to withhold and remit 30% of the gross rent to the Internal Revenue Service on behalf of the nonresident alien.

This means that if you want to deduct expenses from your rental income, you are going to have to:

1) provide your renter with a withholding waiver (Form W-8ECI)               before you collect any rent so you can avoid the otherwise mandatory 30% withholding.

2) file a U.S. income tax return to report and pay tax on your net rental income.

If you haven’t chosen to eliminate your withholding tax from your rental income, your withholding agent is required to provide you with Form 1042S, detailing the amount of gross rental income received and the amount of non-resident tax withheld. Form 1042 must also be filed with the IRS. You can then choose to file a U.S. income tax return – or choose not to and forego any savings of the 30% withheld.

Here’s the big catch; if you haven’t had non-resident tax withheld, you must file a U.S. tax return. If you don’t do this within the specified time period, the IRS will not only disallow all deductible expenses but will also assess penalties for late filing and underpayment of tax.

A Little Research Can Save a Lot of Grief

This article only deals with three situations that might bring foreign income into your tax scenario – there are others, of course. As you see from the example of having rental income from a property in the U.S., you never want to wait until you’re sitting down to do your taxes to find out how something like having foreign income will affect your income tax. Finding out in advance will help you maximize your tax savings – and stay out of trouble with the tax agencies in both countries.

QuickTax, Tax Tips & Advice, TurboTax, Uncategorized

The Real Cost of Not Paying Your Taxes on Time

No Comments 09 March 2014

Getting your income tax filed and paid up if you owe money is just something that you have to make a priority, no matter what. It’s too expensive not to.

The Penalties for Paying Late

Compound Daily InterestWhen-and-How-to-File-Corporate-Income-Tax

For one thing, if you don’t pay your outstanding income tax balance by midnight on April 30th, 2014, the Canada Revenue Agency (CRA) starts charging compound daily interest the very next day, May 1 – and keeps charging it every day until you’ve fully paid off whatever money you owe.

On May 1st they will also start charging you interest on any penalties assessed on your tax, such as the late-filing penalty. (See the next section.)

The interest rate for overdue taxes from January 1, 2014 through March 31, 2014 is 5%, but this is subject to change. The rates are calculated quarterly, so the interest rate that will be applied in May, 2014 may be higher or lower than this.  You can see the current and past prescribed interest rates here.

The Late-Filing Penalty

If you don’t get your personal income tax for 2013 filed by the April 30th, 2014 deadline, you will also be charged a late-filing penalty, which is 5% of your 2013 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

If you’re a “repeat offender”, the penalty is more severe; If the CRA charged you a late-filing penalty on your return for 2010, 2011, or 2012, your late-filing penalty for 2013 may be 10% of your 2013 balance owing, plus 2% of your 2013 balance owing for each full month your return is late, to a maximum of 20 months.

No Benefit Payments

And eligibility for many benefits, such as the Canada child tax benefit and the GST/HST credit, depends on the information on your income tax form such as your net income. If your income tax return is filed late, your benefit payments will be interrupted, as the CRA will not know what your current eligibility status is.


Advice for Late Payers

1) Don’t put off filing your taxes on time because you think you may owe money or are worried about being able to pay all the tax you owe. If you do, you’re just making things even worse for yourself financially.

Instead, make sure that you get your income tax filed by April 30th even if you can’t pay all the tax you owe on that date. That way, even though you may be charged interest on the unpaid balance, at least your benefit payments will keep coming and you won’t be charged a late-filing penalty on top of everything else.

2) Check out the possibilities of paying over time or having your interest penalties for paying late waived.

The Canada Revenue Agency is open to making payment arrangements with taxpayers who can’t pay all the income tax they owe by the deadline. When the time comes, call them at 1-888-863-8657 if you need to.

Also, under the CRA’s Taxpayer Relief Provisions, interest penalties may be cancelled or waived in the case of

  • extraordinary circumstances;
  • actions of the CRA;
  • inability to pay or financial hardship; or
  • other circumstances.

To make such a request, you will need to complete and send in Form RC4288, Request for Taxpayer Relief.

So if you find yourself in this situation come April, don’t panic. Instead, contact the Canada Revenue Agency as soon as possible and get the situation resolved.

Tax Tips & Advice

Resolve to Improve Your Finances: Four Tips for the New Year

No Comments 18 December 2013

EOY Tax TipsIt’s that time of year again: holiday season. And after all of the get-togethers, late nights, and over-indulgence, many of you will adopt New Year’s resolutions that include everything from giving up vices to getting in better shape. Health will undoubtedly be a common theme, and while that typically refers to the body, it’s also a good time to look at your financial health. The following tips will help improve your finances in 2014:

Get Rid of Debt

“I’ll pay off my credit card/loan/financing debt next month” is a phrase many of us utter, but few follow through with. By retaining a debt, you constantly accrue interest, keeping us in a cycle of unnecessary spending. But this doesn’t have to be the norm. In fact, the Canadian Bankers Association recently pointed out that more than 64 per cent of Canadians entirely pay off their credit card debt each month. That can be you. Why not start taking steps towards paying off your debts in January? When setting your budget for the month, consider what it will take to eliminate your debt altogether and plan accordingly.

Prepare for Emergencies with a TFSA

Even the best laid plans can go awry, so expect the unexpected – especially when it comes to your finances. A simple way to do this is by creating an emergency fund. If you carry debt you are far less likely to start planning for the future. Putting aside some money each month into a Tax Free Savings Account (TFSA) with may help to prevent you from having to go into debt.

TFSAs make your income, interest, and gains tax free. You can use them to save up to $5,000 each year and can withdraw from them anytime. So, should you suddenly need money in a hurry you will be ready.

Save for a Down Payment

Homeownership can seem like a distant fantasy to many Canadians who are just starting out. However, by planning strategically you can make that dream a reality. First, understand the facts. The minimum down payment is 5 per cent, though by paying so little you must take out insurance, which can prove costly. With that in mind, by paying 20 per cent instead you can do away with mandatory insurance payments. That should be your target.

Additionally, if you have an RRSP you can look at the Home Buyer’s Plan; it allows you to withdraw up to $25,000 without being taxed. This essentially acts as a loan to yourself, requiring you to pay back into your RRSP over 15 years. It’s a simple step that can jumpstart your journey to homeownership.

Get the Most from your Retirement Savings

Planning for retirement means taking a very honest look at where you are today: your lifestyle, your income, family status, where you see yourself in the years to come, and what you want to do once you retire.  All of these factors play an important role in how you save and invest for those post-career days.   Estimates show that an average couple spends about $50,000 per year once retired. That can sound daunting, though there are a number of invaluable resources at your disposal. For instance, if you have worked most of your life, you can expect the Canada Pension Plan (CPP) and the Old Age Security Program (OAS) to provide approximately $30,000 annually.

As always, your ability to save will be directly affected by the debt you carry, the interest you pay, and, of course, the surprises you encounter along the way. Whatever your retirement goals, plan to save more, spend strategically and, most importantly, start today.

How will you improve your finances in the New Year?


Adapted from New Year’s Resolutions That Will Improve Your Finances in 2011


Seniors, Tax Tips & Advice

Some Rules About Charitable Giving

No Comments 04 December 2013


‘Tis the season to be giving. And why not? When we make a donation to a registered charity, we not only get the satisfaction of helping a good cause now, but a reward later in the form of a tax credit on our income tax.

But to protect yourself from fraud and to make sure that you get all the tax credits you’re entitled to, there are several things you need to know before you give.

1) Make sure you’re giving to a real, registered charity.

First of all, there are many unscrupulous crooks out there trying to prey on people’s generosity. The Canadian Anti-Fraud Centre warns that this is the peak time of year for fake charity scams. Such bogus charities often use names that are very similar to those of legitimate respected charities. Here are the Canada Revenue Agency’s (CRA’s) tips to avoid fraud.

Second, only Canadian registered charities or other qualified donees may issue official donation receipts that qualify for charitable tax credits – and no receipt means no tax credit.

So do your homework first and make sure the organization you want to give to is legitimate and registered. Go to the Canada Revenue Agency’s Charities Listings to confirm that a charity is registered under the Income Tax Act.

2) You can give to qualified donees as well as charities.

Qualified donees are organizations that, like registered charities, are empowered under the Income Tax Act to issue official donation receipts. They include registered Canadian amateur athletic associations, registered national arts services organizations, and listed Canadian Municipalities. View the complete list.

3) Be aware that although qualified donees can issue official donation receipts, they aren’t required to do so.

So if being able to claim the donation is important to you, make sure you ask about getting an official receipt that you can use for income tax purposes at the time you make your donation.

4) Cash isn’t the only thing you can give and get a tax credit for.

You can’t get charitable tax credits for giving your time or volunteering your skills. But you can gift the charity or qualified donee with personal property, shares, stocks or land.

Note that while there is no capital gains tax on the eligible amount of publicly traded securities donated to registered Canadian charities, that isn’t the case with property where any capital gain you have made on the property since you acquired it may be subject to tax.

If you’re interested in donating property, see the CRA’s  Pamphlet P113, Gifts and Income Tax.

If you’re interested in donating securities, see the CRA’s  Capital gains realized on gifts of certain capital property.

5) Donation schemes are a bad idea.

Donation schemes promise that you will get tax refunds greater than the amount of money or gifts you give to a charity through funneling your donation(s) through a tax shelter arrangement. Don’t be drawn in!

The CRA warns that they audit all gifting tax shelter schemes and have not found any that comply with Canadian law. They also warn that the CRA will put on hold the assessment of returns for individuals where a taxpayer is claiming a credit by participating in a gifting tax shelter scheme, and that assessments and refunds will not proceed until the completion of the audit of the tax shelter, which may take up to two years. And besides having all your donations disallowed as tax credits, you can also be charged penalties and high interest on your now unpaid tax that you didn’t expect to be paying.

But Do Give!

Don’t let any of this information put you off – there are so many worthy charities that need your help to do what they do and the glow of giving is not to be missed. You just have to be a little careful if you want that warm glow to return in April come tax time.

Tax Tips & Advice

Year-End Tax Strategies

No Comments 27 November 2013

With little more than a month before December 31st and the end of the tax year, you may think the only thing you can do now to lower your income tax bill next April is make charitable donations.

But while giving to charity is on our list of tax strategies below (and just a great thing to do!), it’s certainly not the only thing you can do to reduce your payable income tax before the year is out. Checking off the strategies on this list can take you to a whole new level of holiday cheeriness.

1) Contribute to your Registered Retirement Savings Plan (RRSP).

If you’re not over your contribution limit yet, this is the best possible way to reduce your income tax because it’s a dollar for dollar straight-off-the-top tax deduction.  Check your Notice of Assessment or Notice of Reassessment from the Canada Revenue Agency for 2012 to find your RRSP deduction limit for 2013. The RRSP Deduction – Should You Use It This Year or Carry It Forward? will help you make the most of your RRSP contribution.

2) Put money into a Tax Free Savings Account (TFSA).

Tax Free Savings Accounts are a great way save money.  Interest earned on the money invested is tax-free; that means no tax bill when you withdraw your funds.

The TFSA limit for 20132 is $5,500 – plus any unused TFSA contribution room left over from the previous year, taking into account any withdrawals you made from your TFSA in the previous year. Read Eleven Things You Need to Know About Tax-Free Savings Accounts to learn all the details.

Can’t do both, and wonder which one you should contribute to? See What’s Best? A TFSA or an RRSP?

3) Give to charity.

While only donations to charities and other organizations that have the Canada Revenue Agency’s (CRA’s) seal of approval will earn you tax deductions, the list is long. And up to seventy-five percent of your net income can be claimed as donations!

Maximize your charitable giving by donating more than a total of $200, as you get more of a deduction for donations over this amount. A good idea is to have one spouse claim all the charitable donations for your household on his or her tax return to truly maximize the tax credit.

4) Register your child(ren) in physical  and/or artistic activity programs.

If you do, you’ll then be able to claim the Children’s Fitness Tax Credit and/or the Children’s Arts Tax Credit.  Both of these allow you to claim up to $500 per child to help you recover the cost of registering a child in such a program.

Be sure to check that the program is eligible for the appropriate tax credit before you enroll your child, however, and make sure that you keep your program registration receipt.

5) Hire your spouse or child in your business.

The salaries of employees are always a tax deduction, which means that if you have a business and hire your spouse or child to work for you, you can deduct their salary, too. This can work very effectively as income splitting, reducing your family’s total tax bill by moving income from one family member with a higher income to one with a lower income. But of course there are rules that must be followed.


Tax Tips & Advice

Strange Scary Taxes From Around the World

No Comments 30 October 2013

HalloweenStrange obviously.

Scary because some of these will make you slap yourself and yell, “What were they thinking?”

But as most of these are cases where you pay more tax, not less, you know exactly what the lawmakers were thinking – bringing more money into government coffers. Still, you have to wonder how they came up with some of these.

Another Reason Crime Doesn’t Pay

Taxes on illegal activities have to be among the strangest. Tennessee, for instance, taxes the possession of illegal drugs. Once you purchase any illegal substance in that State, you have 48 hours to report to the Department of Revenue and pay your tax. (You have to wonder if any state police habitually hang out at the tax office just to see who shows up.)

North Carolina has a similar law.

And our own Canada Revenue Agency will definitely tax illegal substances too. Just ask Marc Emery. The BC marijuana activist paid over $580,000 in provincial and federal income tax on the sale of marijuana seeds alone. Apparently, the Income Tax Act does not distinguish between income being legal or illegal. All it says is that any income that you make is reportable and subject to income tax.

Tax Tricks and Treats

With Halloween just around the corner, maybe the thought of becoming a witch has flitted across your mind. If so, you’ll envy the citizens of the Netherlands who can write off the costs of witch training. Margarita Rongen runs a school for witches there offering courses 13 weekends a year (on the weekends closest to a full moon of course). Participants practice outdoor rituals, learn healing with herbs and stones, making potions, divination and fortune telling with crystal balls and hieroglyphs. Fees for the full curriculum run to $2,210 EUR ($3,165 CAD) – a treat of a tax deduction indeed.

Or maybe you’re thinking of visiting a haunted house to get some spooky thrills. Be prepared to shell out more for the treat in New York; there you have to pay sales tax on your haunted house ticket if the admission charge is more than 10 cents. Scary!

Kentucky’s new sales tax may scare you even more – that state has decided to tax candy. The idea is to tax candy that doesn’t contain flour; candy that does contain flour is exempt. The application of the sales tax makes it even stranger, though – some healthy food is getting taxed, too, such as breakfast bars.

Ouch! That Really Hurts!

The state of Arkansas charges a six percent tax on body piercing, tattooing and electrolysis. Fortunately if you are a person wanting to have one of these services done in that state, paying the tax is the responsibility of the seller, not the buyer.


But at first hearing, perhaps the strangest tax of all is the European cow flatulence tax. Cows are gassy creatures. In fact, according to the U.N. Food and Agriculture Organization, livestock accounts for approximately 18 percent of the world’s greenhouse gasses. So the powers-that-be in some countries such as Ireland and Denmark have proposed taxes on farmers and ranchers based on their livestock’s’ output. In Denmark the levy is as high as $110 per cow.

Seniors, Tax Tips & Advice

Nearing Retirement? Time to Give Those Tax Strategies a Makeover

No Comments 23 October 2013

RetirementEver reach into your closet, pull something out and put it on only to discover that it just doesn’t fit you anymore?

Well tax strategies are like that too and if you’re nearing retirement, it’s time to take a sharp look at what you’ve been doing and try out some strategies that will fit your tax and retirement goals better.

It’s not just about reducing the amount of income tax you have to pay as much as possible anymore; it’s also about amassing as large a pot of money for retirement as you can. See how many of these retirement tax strategies you can use.

1) Fully contribute to your Registered Retirement Savings Plan (RRSP).

RRSPs are the workhorses for reducing the amount of tax we have to pay on our incomes. The money we put into our RRSPs is protected from tax! And we get to subtract our RRSP contributions for the year directly from our incomes which can lead to substantial tax savings!

But according to Statistics Canada, only 24% of eligible tax filers contributed to an RRSP in 2011 (the latest year for which Statistics Canada numbers are available) and the median contribution was only $2,830, meaning half the people contributed more than that and half less. That’s a lot of potential RRSP contribution room going to waste.

So one obvious tax strategy for people nearing retirement age is to be sure to use all the contribution room available to them.

2) Consider putting off claiming your RRSP deductions.

A not so obvious tax strategy involving RRSPs that can be very effective is not claiming the tax deductions on your RRSP contributions for several years before you retire. Because you can carry RRSP contributions forward, you can use those potential tax deductions in later years instead.

There are two different situations where you might want to use this strategy.

The first is to prevent you from having your income heavily taxed when you turn 71 and you have to start withdrawing money from your RRSP. This commonly happens when people don’t take money out of their RRSPs until they hit 71 because they didn’t have to, thanks to having good pension plans and successful investments. “Banking” your RRSP contributions and then using them to offset your suddenly increased income could significantly lower your tax rate.

Another scenario where you might want to apply this strategy is if you are almost 65 and think you may be eligible for Guaranteed Income Supplement (GIS) payments. Because RRSP deductions reduce your net income for tax purposes, claiming your RRSP deductions for several years at once when you turn 65 could reduce your income to the level required to prevent having your GIS benefits clawed back.

3) Join a Pooled Registered Pension Plan (PRPP).

Pooled Registered Pension Plans are new retired investment vehicles created so working people who don’t have workplace pensions can participate in a registered pension plan. If you are employed by a business that doesn’t offer its own pension plan, or self-employed, and PRPPs are available to you*, joining one can boost your retirement nest egg.

4) Use a spousal plan so you can continue to contribute.

Everyone knows that when you hit 71, you have to convert your RRSP to an RRIF (Registered Retirement Income Fund) and can no longer add any money to it. But you can still contribute to your spouse’s RRSP as long as he or she is less than 71. And the beautiful thing about this strategy is that you can still claim tax deductions on the amount  you’ve contributed. See How to Take Advantage of Spousal RRSPs.

5) Keep your Tax-Free Savings Account (TFSA) topped up.

A TFSA can be another very handy way to put money away for retirement. The best thing about it, though, is that when you put money into one, that money generally continues to be tax-free –even when you withdraw it.

The money you withdraw from your RRSP, on the other hand, is taxed. Read more about how contributing to a TFSA or an RRSP compare in What’s Best? A TFSA or an RRSP?

(And if you are very close to the age when you have to close your RRSP, convert it into a RRIF and start withdrawing money from it (age 71), note that there are no age limits on making contributions to a TFSA. You can contribute to one when you’re 91 if you want.)

*Note that at time of writing, PPRPs are not available in all provinces.

Tax Tips & Advice

Shop Smart: Tips for Getting Through the Season of Spending Unscathed

No Comments 17 October 2013

Holiday ShoppingThanksgiving officially kicked off the season of spending. Halloween, Black Friday and Christmas are just around the corner!  To avoid shock on your next credit card bill, there’s an easy way to save money: leftovers. Approximately 60 per cent of Canadians buy at least one lunch per workweek and that adds up quickly. So, if you’ve been bringing in turkey sandwiches for the last few days, you’re ahead of the game. During the most expensive time of year, getting the best value for your dollar is paramount. With that in mind, the following tips will help you shop smart from now until the end of the year.

Halloween: Recycle, Reuse, and Rummage for your Costume

With Thanksgiving in the books, the next big event is fast approaching. A 2012 Retail Council of Canada poll suggested that Canadians spend an average of $75 on Halloween. As you know, you don’t have much wiggle room when it comes to what you hand out – sure, you want to be healthy, albeit you don’t want to see your property toilet-papered; it’s a fine line. Remember: buying in bulk is essential. How else can you save money?

If you’re not a packrat, you still likely have the makings of a good Halloween costume hidden in your closet, so get creative. Otherwise, hit your local vintage or discount store and do it early, because the competition is fierce.

Black Friday: American Thanksgiving Equals Canadian Savings

Following American Thanksgiving in November, Black Friday is a retail extravaganza that typically shatters sales records. In the past, it was largely reserved for bargain-hunters south of the border, though it began attracting ever-greater numbers of Canadians. To counteract lost revenue, many Canadian retailers now offer their own Black Friday promotions.

Furthermore, the following Monday – Cyber Monday – is quickly becoming one of the best online shopping days of the year, with plenty of deals accessible directly from your computer or mobile device. More and more Canadians are shopping online, with a Forrester research report predicting that, over the next five years, annual sales are expected to rise from $20.6 billion to $33.8 billion. Why not take advantage when online shopping is most affordable?

Of course, neither of these days is an excuse for binge buying, yet they are fantastic chances to get deals on the things you would buy anyway.

Gift Buying and Traveling: Think Ahead

In mid-December, you will probably ask yourself, “Why didn’t I think ahead!?” Enduring a mall on December 24th is stressful and diminished options mean you will pay more. The people on your gift list don’t tend to change, so shop all year long, taking advantage of any sales or timely opportunities as they present themselves.

This approach also applies to travel. If you’re heading out of town, make arrangements early, consider car pools, and watch for changes in airfares. Also, if you can travel on December 25 or 31, you will get the same service at a better rate.

Sure, you will spend more than usual during the holidays, but if you plan ahead and budget correctly – using online tools available from – you can limit the damage to your bank account.

So, do you have any tips to shop smart this holiday season?