Posted by Tim Stobbs on April 4, 2013
I think I have a similar point of most people when it comes to taxes. I don’t mind paying them if they provide good service, but I don’t want to pay more than required. Yet when it comes to my yearly tax bills there is one they could potentially double and I would still pay with a smile on my face.
Yes, you did read that correctly. I like paying one of my taxes, actually forget that, I LOVE paying this one tax. Which one? A small part of my property tax bill is devoted to our local library system which I gladly pay and hell I would still be getting a bargain even if they doubled it.
Why? Because for the mere $200 or so I pay in tax each year I’m saving a TONNE of cash. How much? Well I haven’t actually tracked a full year of what we borrow from the library, but this is what we have borrowed in March alone:
- 12 books for my wife
- 12 kid movies (including a full season of Star Wars Clone Wars as one item)
- 15 kids books
- 5 DVDs for me
- 3 book for me
- Two ebooks for me
and a partridge in a pear tree
What what exactly would all this retail for? Well it sort of hard to say since I don’t actually pay for these and haven’t in such a long time I often don’t have a clue how much someone would pay to rent a DVD. I’ll go with a rough estimate of $4/DVD rental (based on the prices on iTunes and Google’s Play stores).
The books are a bit more complex. My wife tends to borrow more paperbacks than I do, but new hardcovers are really pricey, so I’ll just average them and say about $14/book. The kids books include the little level reader ones and hardcovers so again the prices vary, but let’s average $12/book.
So in total the movies were worth 17 x $4 = $68, the kids books were worth 15 x $12= $180, and the adult books 17 x $14= $238. Or in grand total $486 for March alone.
Now March was a bit high for books for my wife, but otherwise a fairly normal month for us. We like to read and watch movies a lot so we tend to borrow a lot of material. Yet to be fair I’ll scale that down by 20% to be more representative of a long term average, so that would take it down to $389. So over a year our library usage is worth $4668 for the mere tax of $200/year or over 23 times the value I pay for it. And people wonder how I’m able to live on so little.
Yes the library is the best tax payment I make ever year. Now a fair number of people don’t realize how great the library really is and thus don’t use it. So to those people I will say: thank you for paying for my family to use all that material. Just because they are too impatient to wait for a hold to come in, I get easier access to my materials and still save a boatload of cash.
So what’s your best tax bill you pay each year? Or what do you love/hate about your local library?
Posted by Tim Stobbs on February 13, 2013
Well with tax season nearly here, the good people over at at TurboTax are looking to help you with your taxes, so they contacted me about doing a give a way. There are two prizes: online codes to use TurboTax Online for free! (Granted if your taxes are simple enough you may be able to use TurboTax Online for free anyway, so go have a look).
Ok, I will totally admit I’m bias here as I’ve been using their product for years now. Granted I could do my own taxes on paper, but I still buy their software….why? Because they make getting through the maze of deductions easy and when you have two small businesses and investments: I want easy.
So to enter I’m going to make this contest very simple: just leave a comment with your real email address on this post (as that is how the winners will get their prize). Contest open to residents of Canada. Deadline to enter is 8pm CST on Feb 20, 2013. Winner will be selected by random number generator.
Good luck to everyone.
Posted by Tim Stobbs on March 14, 2012
You read that title correctly: yes, I do like to owe at tax time, even if I actually don’t plan for it. You see I actually plan to get a close to zero refund as I can with my tax planning. So I fill out my TD1 forms, calculate my RRSP contributions and guess a little at the year ahead in order to get no tax refund or owe anything. Yet as you are likely aware life never works out that way.
So owing tax at the end of the year is a good sign to me as that means I earned more than I was guessing at the start of the year. While yes that does mean I end up having to consider paying a lump sum payment after I file my taxes I really don’t mind for the most part. After all I usually keep some money in saving to cover off this issue if I start to notice that I’m earning more than I would have guessed. Actually in late 2011 I made an extra lump sum contribution to my wife’s RRSP since I noticed I was doing much better on income than I thought I would.
I used to tax plan like most people and be very conservative on my estimates and would often get a refund at the end of the year. Then it occurred to me that I was giving the government an interest free loan of ‘my money‘ ever year that happened. So I decided to change my plan and aim for the zero refund.
I would caution that aiming for a zero refund in general takes more work. After all I often have to change my TD1 form at work in order to adjust for any changes that will occur in the year ahead. I also intentionally keep my taxes taken off my second job low in order to give me a bigger cash flow during the year which makes saving in our RRSPs easier. By the way, in case you were not aware of this fact the easiest way in the world to owe taxes is to have more than one job, since each job only assumes you only work for them you never get enough tax taken off at the second job. (In technical terms what happens is both work places assume you can use your basic tax deduction, when in fact you can only claim that once.) In order to compensate for this you either have to ask for extra tax be taken off on your TD1 form or contribute most of that second income to RRSPs. I personally go with the second option as saving is easier with a larger cash flow during the year.
How do you plan for you taxes? Do you like to owe money or get a small refund? Also can you tell I’m getting ready to do my taxes since this has been on my mind lately?