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I think this topic was already mentioned at this forum

The similar subject was already observed somewhere at this thread

You will see an article below on HENRY (High Earning but Not Rich Yet).

These are people who earn $250,000 to $500,000 (High Earning) per year
but are not Rich Yet.

Amazing but true. If you earn $250,000 per year and spend more than that,
you will have the same stress or more than someone who spends more than
they earn at any level of income.

You will see notes on a book by David Bach here in this section. It is called
the Automatic Millionaire. Please read that after you read this somewhat
depressing HENRY article.

I guarantee you that a HENRY would tell you that David's book is simplistic
and unrealistic. Why? Because the simple things that would bail them out
are 100% within their grasp and even within their knowledge but they don't
DO THEM for no valid reason.

Even if you never earn more than $50,000 per year, you can become a
millionaire over 10-20 years.

It's not what you earn it's what you KEEP that counts and more importantly
what and how you INVEST IT that counts.

Don't be a HENRY. Do what David bach says and you will win.

http://money.cnn.com/2010/05/03/news/economy/henrys_struggle.fortune/index.htm?source=cnn_bin&hpt=Sbin

I did a write up the other day for how to promote the Supreme 2x2 Matrix.

The same applies to TSP and any other business or program you want to
promote!

Thus, click below and study the material there and transfer over that basic
procedure to The Secret Pays.
http://www.wealthbuildingenterprise.com/forum/index.php?topic=121.msg121#msg121

And as always, feel free to email me anytime when you need answers or help!

Ron

We all need a stable home business for extra income and for the great tax savings that are available as a result. (See tax section of the forum for more details)

The Secret Pays is a home business based on 'The Secret' that has been in existence for 5 years. It works on the principle, 'movement of money through your hands creates wealth'.

This business has the potential to move $100 payments into your hands over and over from a greater and greater number of people. It can build up over time, as each new person you introduce to the business sets up a whole new potential profit line for you that can set off a chain reaction of $100 payments into your bank account.

As with any business, it has to be promoted and our team has a system you can duplicate to enable you to succeed. The entry fee is a one-time $125 with no recurring or monthly fees, no autoships and no other fees.

If you like the sounds of this business but cannot come up with $125 right now, consider joining the Supreme 2x2 matrix first in order to generate a $100 payout to you. Then from this you can join 'The Secret Pays', making you permanently paid on BOTH businesses!

The product you get for these funds (aside from the income opportunity) is a library of materials related to The Secret. This library is without question the best I have seen for such a business and I downloaded over 20 quality e-books which in themselves were worth much more than the entry fee.

l have just recently started into this particular business, however my sponsor has been at this for 2 years and has received about five hundred $100 payments! Yes, that is a lot of money!
 
It is a 5 year old business, so it has stood the test of time and many people have made money with it.
 
In joining our team, I will be personally coaching you so you succeed along with us.  If you can sign up today, please do so right away.
http://bit.ly/aONMUx

If you cannot cover the $125 fee currently, I suggest you join the Supreme 2x2 Matrix instead, using that to make some money as well as using it to raise the membership fee for The Secret Pays.

And lastly, if you have not yet registered for the One Year free information and coaching on the Law of Attraction, you would do well to get started on this today. Just fill in your first name and email at this link and the process starts!
http://www.wealthbuildingenterprise.com/oneyear.html

Good luck!

Ron

Taxes of every sort are the largest single expense of most Canadians and I don't think the US or other areas are any different. Do you want to be a tax payer or a tax saver?

If you focus more on accumulating valuable assets than increasing your taxable income, you can grow your wealth more rapidly and have a much smaller tax liability. For example, a $50,000 increase in yearly salary would incur a considerable tax hit whereas a $100,000 increase in equity in your real estate portfolio (your home and one income property for example) is not even a taxable event! Think about that.
Personal taxation in many countries has grown to oppressively high levels, with income tax, gas tax, property tax, goods and services tax, etc. When all is said and done, 50% of your income is gone.

There is no way legally to completely escape from taxes and really no need to. Paying some taxes is a form of exchange to the local government for their services (road repair, police protection, public schools, etc.). Saving as much as you legally can in taxes is your right.   

Most people pay too much in taxes because they simply don't understand the towering stacks of regulations, exceptions and benefits. So this is one place where you need to get professional advice (your accountant) and/or yourself become an expert.

What we are looking at here is a legal reduction of payable taxes through valid deductions and credits.

Filing a tax return every April (or June depending on your business) and not paying much attention to tax consequences for the rest of the year is a very shallow view of tax handling. It is like an Olympic athlete sitting around for 4 years and then training for the Olympics a few weeks before it starts. It would be a joke and he/she would lose heavily.

In order to maximize tax benefits, you need to take a 5 to 10 year view and must view this subject all year long.  Every key decision to buy or sell assets has to consider it.  Every new income stream has to consider it (as to type of income to be generated and the quantity).  Every charitable gift or large gift to a family member has to consider it. Every property or asset transfer has to consider it.

‘Tax avoidance’ is sometimes confused with and made to seem equal ot ‘tax evasion’ and to discourage people trying to minimize their taxes payable or using legal tax deferral structures.  Legally reducing your taxes payable through legal deductions and credits of all types is tax avoidance and is legal.

The IRS contributes to confusing this issue by fear-generating tactics around tax time, attacking tax havens (many of which are perfectly valid and legal) and making it appear that tax reduction is tax evasion. 

However, be warned that ‘fudging’ your return, not reporting some sources of income, putting deductions in that are exaggerated, hiding income, etc., these things are dishonest and are called 'tax evasion' and should not be done.

Unfortunately tax evasion carries a prison sentence comparable with manslaughter at times (up to 10 to 15 years in prison), so don’t do it no matter how much you dislike taxes or how ridiculous the laws seem. There is always a legal way to accomplish the result you want.

Following are some specific and important rules and strategies about how to win the 'tax game'. Consider it as a game to be played with strategy in order to defeat an opponent and accomplish a victory (financial freedom and early retirement). 

IMPORTANT major strategy: wait to trigger any tax hit for as long as possible. Any taxation comes from an action you do in your life that triggers a taxable event. Many of these events can be modified or legally delayed to give you an advantage.

Delaying a tax hit just from December 31st of one year to January 1st of the next year (one day) leaves your taxable income or profit in your hands for a WHOLE EXTRA YEAR to turn into more income or profits before tax is payable. 

An RSP/IRA/401K (retirement account) delays the tax trigger on the funds contributed to it for half a lifetime or even more if part of it is passed along and inherited. An RRIF (Registered Retirement Income Fund), which RSP funds are transferred to before payouts begin, delays it even more.

There are many ways to legally delay (legally defer) a tax trigger on a transaction. And while it is delayed YOUR funds and assets can continue to grow tax free. This helps your net worth. 

Adjust your tax withholdings with your employer (if you are employed). There is a form you fill out (in Canada called a T1213 form) and is filed to a local tax services office. The change is implemented after CRA (tax dept) clearance. This form can be filled out any time you have a change in your financial status (example, starting a home business). If you got a tax return last year, too much tax was being taken from you throughout the year and you can fil out this form to change that.

Basic deduction for 2009 is $10,320 (federal) $8,881 (Ontario). The amounts deducted from tax payable are $1,548 (Federal) and $537 (Ontario). 

Spouse deduction is the same federally and $7,541 for Ontario but are reduced or eliminated provincially when your spouse makes income. The amounts deducted from tax payable are $1,548 Federal and $456 for Ontario. 

Caregiver amount approx $4,200 Fed and Ontario. Amounts deducted from tax payable are $630/$253.
Child deduction about $2,089 (Fed), 0 Ontario. Deducted from taxes payable is 0. Child amount under 18 years old is $313 Fed.

Caregiver deduction: if Lluvia comes to live with us and wants to help take care of mom, that gives an additional $4K deduction. This is reduced depending on the Net Income of the person being cared for.
Deduct Medical Expenses: this is lesser of 3% net income OR $2,011 federal and $2,010 for Ontario). These are credits to be deducted from taxable amount. Can deduct all expenses for a period of a year ending any date in the previous year.

Claim medical expenses on lower income spouse. This is a federal tax CREDIT which means it comes off fed taxes dollar for dollar up to a certain amount but only over a certain percentage of taxable income. That is why it comes off the lower income spouse. Other credits should be deducted from the higher income spouse´s return.

Education: $120 part time per month and $400 full time (fed) and $143/478 ON. Also credits for textbooks (Fed only) $20/$65). There are also small credits directly deductable from taxes to be paid.
Any education done that is relevant to your work is tax deductible but as a CREDIT. This means if I buy an online course in real estate or if I want to do a Masters or Bachelors in real estate, that is tax deductible.

Just have an exact job or work lined up, started part-time and do your training for that so it is easily documentable what you are doing. An investment in yourself and in your knowledge is the best investment per Ben Franklin and the government has now made it tax-deductible.
Canada employment credit $1,044 (Fed). Study more how this works. Actual amount to be deducted is $157.

Indexing credit: $1,025 (Fed), $1,023 ON.

Buying First Home: get a tax credit of $750 on the purchase. 

Home Renovation Tax credit: can get up to $1,350 credit $10K expense minus $1K x 15%. 

Note: tax laws change all the time and vary considerably by specific locale. Verify
anything you see in this document with a local tax Pro before submitting deductions
to the tax department.

As a landlord, you can deduct the following from rental income received: property tax, insurance costs, heat/light/water, salaries to supers, etc., accounting services, legal fees (not ones connected to property purchase), commissions to rental and collection agents, landscaping costs, payments to tenants to cancel their leases, interest on money borrowed to improve the property, certain auto expenses (collecting rents/managing property), snow plowing, raking leaves, cleaning up, current general maintenance and repair (but not the value of your own labor and not property improvements that enhance ORIGINAL property value – these are called “capital expenses”). And they have to be deducted in same year you pay for them.

Note: this also has application with the same deductions if you are doing improvements on your home to rent to tenants.

Also, amounts credited to principal on 'lease to own' deals would be deducted. In fact, all 'lease to own' amounts are deferred tax wise until the lease is ended one way or the other.

Painting, fixing leaky faucets, patching walls, sanding floors, and doing a thorough cleaning can increase
resale value by thousands of dollars (or can increase the amount of rent you can get for it).

Note: money spent to put newly acquired older building in shape to rent is regarded as capital expense (i.e. not tax deductible) as are repairs spent in anticipation of selling the property or that are a condition of sale (unless the repairs would have been made in any case).

The idea therefore is spend the least possible money on a 'fixer' (unless you have a tenant living in the property already) and don’t include anything as a tax deduction that upgrades the property over its original value, as this is just taxable under 'capital expenses' (Capital Cost Allowance deduction).

Note: fixing up a rental property that is already tenant occupied does not fit under the above, as you are not selling it. Any renovations made under such conditions are deductible.

Thus if you are going to buy and upgrade your equity in a fixer duplex make sure it already has tenants and that the existing rents exceed expenses and leave a positive monthly cash flow!  This gives you an immediate cash flow, instant equity on purchase and immediately upgradeable equity from simple repairs and paint.

Real estate losses are tax deductible. So even if a property goes on the fritz, losses from it are deductible against your overall income. If you make $60,000 total taxable income and lose $20,000 on a property due to lack of occupancy or whatever, your taxable income would be $20,000 lower, which could lower your tax bracket. 

Longer investments have a better chance of tax breaks upon resale (i.e. reselling a purchased property in a couple of years as opposed to a few months). This is because of your INTENT to purchase the proprerty to rent out, which converts the profits on sale from 'earned income' to 'capital gains'. Capital gains are taxed at half the value of earned income.

Note: this document is a little long but each part of it has info that can and will
save you taxes on your hime business and put money in your pocket. Take note
that tax laws change and they vary from area to area. Have all deductions verified
by a tax pro FOR YOUR AREA before submitting your tax return.


This is one of the most powerful sources of multiple tax deductions and savings, even though your business is not yet profitable.

More and more people are getting smart and starting home businesses. This is expected to absolutely boom in 2010 as unemployment heads to higher levels and job dissatisfaction and an urge for independence pushes people to look for something they can do from home.

There are also many single parents who could use an income stream that can be generated from home so that they can take care of their own children and still have a good income source.

In the US, Congress passed various laws that allow for deductions on home businesses and therefore encourage them. This is because they saw that a person with a part-time home business already running and making money could easily ramp that up to a full time job and income should they lose their main source of income.

Similar laws have been passed in Canada that give significant tax deductions for home business that are not available to employees with such a business.

There are a whole series of tax deductions you can take when you own a home business. The good thing about home business tax deductions is that they allow you to operate on the same advantaged basis as big business. Specifically this means that you pay your home business expenses from before-tax income and pay taxes on income that remains after expenses. In other words, you make money in your home business and you cover your expenses from the income. You pay tax on the rest.

As an individual employee it is the opposite. You make money and are taxed on it FIRST and then you pay your expenses with your reduced after-tax dollars. 

Starting and running a home business can be done in as little as 45 minutes per day 5 days per week. And in exchange for this little work, you can save $1,000 to $5,000 or more in taxes each year in deductions even if you are not yet making an profits from your home business!

It's a piece of cake to start a home business. If you have no other immediate ideas to get started, just join one or more of the programs you see on the INCOME page of the Wealth Building Enterprises website. You will get full team support and assistance in becoming successful with your business.

All home business expenses are tax deductible. You can even deduct a percentage of ALL HOME AND CAR EXPENSES!

Advantages of a home business: you can stay at home with your children, make extra money to pay down debts and the mortgage and invest in real estate and other assets to create even more income streams. Plus your home business itself could be several income streams (each business you are an affiliate for can be an income stream).     

Tax Installments for home businesses and self-employed persons in Canada are due on 15 March, 15 June, 15 Sept and 15 Dec. Your tax return is filed as usual in April or June. You also have to pay CPP (Canada Pension Plan) up to $3,722 but not 'EI' (Employment Insurance).

Working your own home business, you could potentially make less money than you did working for someone else and still come out ahead after taxes!  It´s the after-tax disposable income that counts. 

You have to have evidence that you are working from home with the intention to make money and that you have a home business OFFICE space that looks like one. Tax laws allow you to deduct business expenses whether you make a profit or not, as long as you legitimately try to make a profit.

You can deduct a percentage of all your HOME or APARTMENT expenses from your taxes. You calculate the number of square feet in your home and then the number of square feet in your home office space. You divide the home office space by your home space and you get a percentage.

Example: Home is 1000 sq.ft. Home office is 100 sq. ft. So you divide 100 by 1,000 and get 0.10 or 10%. This means you can take 10% of ALL home expenses as a tax deduction, including 10% of rent or mortgage interest, 10% of all repairs, maintainance, heating, electricity, etc.

You can include an adjoining hallway and bathroom in the office space calculation and you can subtract unfinished basement space from the size of your home. The larger your office space in relation to the size of your home, the bigger the tax deductions.

Two types of tax deductions: direct deductions from income (business expenses) and CAPITAL COST ALLOWANCE (CCA) (yearly depreciation of business ASSETS as a deduction). Direct deductions would include all office supplies and expenses but not equipment. Any equipment such as computers, printers, desks and chairs, etc., would be covered under CCA and a percentage would be deducted yearly based on their original cost.

Splitting income is a good way to decrease taxes legally. For example if you have a large home business income and have a partnership with your spouse (where you each do functions in relation to the business) you can split any business income in half, each partner counting their half in their income tax return along with their half of the deductions.

If one or both spouses also work jobs outside the home, the higher Income spouse can pay the household expenses and take the deductions for the home business while the lower income spouse invests their money to create capital gains. That way the capital gains are not taxed to the higher income spouse at a higher tax bracket and the lower income spouse does not have their income wasted on expenses and thus is able to invest. 

You can hire a family member for services performed and pay them on a regular basis, just like you would any other employee. This splits income and thus lowers your taxes. This can be done with a spouse or other family member who is not a partner or can be one of your children who is a bit older and realistically able to carry out some duties such as delivering flyers, cleaning the office, filing or other simple functions.

You pay them a salary and deduct it from your home business income. In this case you file a tax return for your child each year. He/she would likely have little to no tax to pay as the amount is not high enough to warrant it. But your child gets contribution room in an RSP/IRA/retirement account from the earned income, which helps them to get an early start to build their wealth and retirement fund.

Child care is deductible if paid for allowing you to work. Even kindergarten is deductible as a child care expense.

Moving costs can be deducted if the moving is done to set up business or earn income.

You can count flights and other travel costs for moving you and your family, cost of transporting your things, cost of meals and lodging for 15 days, cost of revising legal docs to reflect address changes, cost of cancelling a lease on the old place, replacing driver´s license and vehicle permits, costs of connecting and disconnecting utilities, costs of selling your old home including real estate commission and advertising, mortgage prepayment or discharge fees, fees in acquiring your new place including legal fees and land transfer taxes.   

You have to earn income in your new place in order to qualify. Can be from employment, self employment, but not investment income. You can deduct up to the amount earned in your new job in the year of the move. You can claim any excess the following year. Your child over 18 years old can help in the move and be paid and it is deductible. 

You can attend 2 conferences per year, tax deductible. That means if one of your businesses has a business conference and you attend, the expenses are deductible.

Employers can give 2 cash gifts per year (tax free to receipient) and 2 non-cash gifts that do not exceed $500 including tax. (Canada)
Gift Tax: you can receive up to $11,000 per year as a gift without being taxed on it (USA). There is no gift tax in Canada.

Deduct travel expenses. You may be able to convert what would normally be vacation expenses into deductible business expenses, just by planning a bit ahead of time and organizing it as a working vacation, doing some work in the location you plan to go to and collecting evidence that you were working there.

The primary purpose of the trip must be clearly documented with evidence to be business. That you have some fun at the same time is not illegal.

Deduct car expenses: all expenses related to your car should be totalled, receipts kept and deducted at the maximum possible percentage. This percent depends on business miles versus personal miles put on your car AS EVIDENCED BY A LOG. You must record each trip you take, its mileage and its primary purpose (business or personal). If you use your car 50% for your home business then 50% of ALL CAR EXPENSES for the year would be deductible. You need to be able to prove it so must have a log and all receipts in case you are audited.

You can deduct mileage for prospecting clients, going to meet them, going to look at properties (real estate investment), handing out prospecting literature including brochures, audio tapes, CDs, newspapers, or networking for new contacts. Anytime you prospect for your home-based business, the mileage is deductible.

Keep a supply of prospecting materials in your car and you could possibly turn any errand into a prospecting trip! Also always keep business cards on you. Again, the key is to keep detailed records.

You can deduct for new tires, maintenance checks, lubes, CAA/AAA, repairs, body work, gas, oil, insurance, etc.

When you have 2 cars use the older or more expensive one for the deductions. The less expensive car can be used for purely personal trips. Note that some cars are classified as luxury vehicles and cannot be used like this. 

Deduct CCA (Capital Cost Allowance) yearly from all business assets. If you are going to acquire a new asset (computer, office furniture, other office equipment, a vehicle for the business, etc.), get it purchased and being used before the end of the year so you can take the CCA for that year.

And if you are going to sell equipment, do it after the year is over and you have taken the CCA on it. CCA applies to your desk, computer, chair, car for business, printer, fax, telephone, software and any other equipment used in the business. 

You can skip a CCA deduction in a low income year where you do not need it and take it in a higher income year when you need it more.

Deduct Phone and Internet expenses if you have a separate business line and use it for your business. Internet and hosting fees are deductible. 

If the value of an asset has gone down and does not look promising for recovery, you can unload for capital losses deduction which can be carried forward up to 10 years and carried back 3 years.

Any advertising fees for your home business are deductible. Essentially any expenses incurred for the purpose of creating income in your home business.
Affiliate commissions and income received from your home business would be counted as home business income. Any payment processor fees that you have to pay to receive this income or to pay for anything related to your business would be valid expenses.

Commissions on items you may sell to yourself are not taxable. If you sell yourself e-books or other stuff on ClickBank for example for your personal use and get a commission, you are not taxed on it. If an insurance salesman sells an insurance contract to himself, he gets the commission as if he sold it to a third party and does not pay tax on it. 

I have included this below write up in a couple of places in the forum here but
the Canadian real estate area is definitely a place where it should be.

One of the most important things I have studied recently is a book called THE
AUTOMATIC MILLIONAIRE by David Bach. I have in fact studied 3 of his books
in the past few months but the one with this title is the most basic and is the
crux of his original work.

This is an incredible piece of work for more than one reason, but the most
important message you can get out of it is that YOU CAN BECOME WEALTHY
whether you are more advanced in years or especially if you have the advantage
of youth ahead of you.

Youth means a LONG time ahead of you in which to compound small and regular
investments into HUGE WEALTH.

See the article on David's book here.

http://www.wealthbuildingenterprise.com/forum/index.php?topic=117.0

And definitely, get this book from your library or the local bookstore and read it. If
you cannot immediately find it, get and read ANY book he has written, as they all
give you the basic concepts that will allow you to simply and easily start to improve
your financial and personal life starting NOW.