Mar 032014

I hope the Canada Revenue Agency doesn’t come after me for writing this post :P If too many people read this article then our government will never have a balanced budget lol. Since it’s that time of year again the topic I’d like to discuss today is income tax, and how rich people are able to dramatically reduce their taxable incomes because they understand that tax brackets are a moving target, and we all have the ability to manipulate our income tax rates as we see fit 8-)

Let’s look at an example below. The following chart shows the income tax rates for B.C. Canada. There are only 6 cells we need to be aware of for the purpose of this article, which I’ve highlighted in yellow. Source:


Let’s say a hypothetical person named Tyler works full time at a retail bank branch and makes $43K a year there. Tyler also bartends a few nights a week. He has a small rental property, and some dividend paying stocks in a margin account. And finally Tyler has a small pasture of alfalfa in the boonies that he operates as a small business and is generating revenue via renting it to cattle ranchers.

Here’s a summary of all his annual incomes.

  • Bank employment T4: $43K
  • Bartending T4: $10K
  • Rental unit: $12K
  • Dividends T5: $5K
  • Small business income: $10K

Total income = $80K

At first glance it appears Tyler is in the $75,213 to $86,354 income range, which should put him in the 32.50% marginal tax bracket according to the tax chart above. But not so fast. Sometimes we need to take a closer look at a situation before we can make an educated assessment.


The more money we make the higher percentage of our incomes should go to the government right? But if that was true, why do some people who earn six-figures have lower tax rates than most middle class people? The answer is because those particular high-income earners are masters at manipulating their tax brackets! #likeaboss

Tyler believes he can use the same tools as the rich and reduce his taxable income in the eyes of the government. Let’s see how he does this.

Continue reading »

Feb 172014

Want to make thousands of dollars by making a simple phone call? It’s easy and anyone, even outside of Canada, can do it (^_-) All we have to do is throw our rich, tax-cheating friends under the bus, figuratively speaking of course :D Do you know any rich people who have undeclared offshore income? If so, you could rat them out to the Canada Revenue Agency and collect a reward ;) Here are the basic conditions.

  • There will only be a reward if the tax cheat owes more than $100,000 to the federal government, not including interest or penalties.
  • If the tip pans out the reward will be 5% to 15% of the total cash collected by the CRA, depending on the quality and relevance of the whistleblower’s information.
  • The unpaid taxes must arise from accounts or assets held outside Canada.
  • To ensure no one profits from a crime they committed, people convicted of tax evasion can’t report their own case.

Pretty straight forward eh :) I hear stories about rich people living in multimillion-dollar homes in West Vancouver, but still receive government assistance and tax benefits because they claim to have “low income” even though they’re operating lucrative businesses in other countries, lol. If you know anyone who owes a lot of offshore taxes to the government then feel free to claim your reward :D That’s at least $5,000 to $15,000 in your pocket. Who doesn’t like easy money right? :) Tipsters can call the CRA’s new offshore hotline at 613-960-4265 or toll-free at 1-855-345-9042. All calls are confidential.

This helps the CRA collect revenue. The whistleblower makes some easy money.  And the tax cheat can have a clear conscience. Wow, everybody wins! :D For years, other countries have rewarded people who snitch on tax cheats. It’s about time Canada put in place a similar program. But to be fair, tax evasion is not a huge issue here to begin with, compared to other countries around the world.

14-02-taxevade, snitch, taxes

Now if only I knew some rich acquaintances, muahaha :twisted: Of course most people who are wealthy tend to stay out of the spotlight.

Random Useless Fact: When a pregnant woman suffers organ damage the fetus will send stem cells to repair the damage.

Oct 172013

Jeane Napoles is in her twenties. She is a keen investor in real estate and bought her first condo when she was 21, the same age as when I bought mine. And last year she bought herself a farm in Bayambang. She even has her own blog where she writes about her life experiences. Ms. Napoles appears to be the girl version of me :) I hope we can meet each other some day and have a conversation about our investments and goals :D

The only difference between us is she’s very open about her personal life on her blog whereas I don’t share as much on mine. She seems to be your average girl who likes to hang out with friends, go clubbing, and enjoys traveling. And like other girls she sometimes has trouble deciding what to wear, especially if she’s going to the Grammy’s. Wow! Good for her :D

Unfortunately the Bureau of Internal Revenue (BIR) which is the IRS or CRA of the Philippines is after her for tax evasion. Uh oh. If it can happen to her, maybe it can happen to me as well (>_<) The BIR commissioner wants to know where Ms. Napoles got the money from to buy her condo. I forgot to mention earlier in this article that the condo she bought is one of the highly coveted residences at the Ritz-Carlton luxury hotel, in Los Angeles, CA, where each unit is worth about $1,300,000 8-O

ritz carlton residences

But the story gets worse because her mother, Janet, is allegedly the woman behind a $220 million dollar government scandal. The public funds she was entrusted with was meant for an assistance program that funds public roads, and benefit low income families. But instead all that money that the Filipino citizens worked hard for went into personal bank accounts, real estate, her daughter’s spending sprees, and more. Now Janet faces the possibility of going to jail.

Meanwhile the BIR has hit young Jeane with a tax bill of $750,000 inclusive of surcharges and fees for taxable years 2011 and 2012. Great googalee moogalee! 8-O First she finds out her mother might be incarcerated, and now she’s served with this gigantic tax bill. Those greedy government bureaucrats eh :P Why can’t they just leave the hardworking citizens alone? What kind of draconian world do we live in when the tax authorities can become suspicious of an unobjectionable girl like Ms. Napoles just because she has a Porsche Cayenne, a Porsche Boxter, fancy jewelry, real estate properties, expensive watches, clothing, and shoes. I mean can’t the poor girl just catch a break :P

Tip of the day: Use proper discretion online and in public, and don’t reveal your financial situation on the internet, especially if you or your family is involved with tax payer’s money. But if you are going to flaunt your lavish lifestyle for other people to see, create an online pseudonym and post anonymously.

Random Useless Fact: How to make your cat look expensive


Aug 152013

Earlier this year in April I started a swing trade which included some Suncor stocks. I mentioned how it was an undervalued company and how the stock will likely make a comeback :) So I bought 100 shares at $28 each. Well I just heard on the news that Warren Buffett also bought some Suncor shares for his holding company Berkshire Hathaway :) Hey, maybe… just MAYBE.. he reads my blog and that’s what gave him the idea to invest in Suncor as well (^_-) Hi Warren :) I’m a big fan!

Buffett had picked up 17,800,000 shares of Suncor 8O When the oracle of Omaha is confident enough to put over $500 million into a company, you know it’s a good investment 8-) Right now Suncor is the only Canadian holding inside Birkshire. Yay, go oil sands!  Represent Canada! I”m not sure what price Buffett paid for his SU shares, but I managed to get mine around when the stock bottomed, so this could mean I’m a better investor than Warren Buffett :lol: Or I just got lucky I suppose. But now I’m faced with a dilemma. I was planning to sell my swing trade when I made $1,000 from it, which I have now. The stock climbed to $35/share today. But now that the world knows Suncor is in Berkshire Hathaway’s portfolio there may be increased global interest in this company. Selling when Warren Buffett is buying may not be smart :? 13_08_suncorchart

Eventually though I will have to sell and most likely make a nice profit from it. But one drawback of making money through any kind of investing is those darn taxes on capital gains, dividends, interest, etc (>.<) Here’s a simple tip to save butt-loads on investment taxes. Before you invest, give the money to someone else in a lower tax bracket whom you trust, and invest the money under his or her name instead of yours :D Continue reading »

Jul 162012

What is the largest expense you have? For me, it’s taxes, which makes up about 30% of everything I make. As a democratic society we are not only responsible to pay our fair share of taxes, but we should also try to understand where our tax money goes.  Did you know the CRA (IRS equivalent) uses up 3% of all our tax money?  Before the next time you sit down with your accountant or pull up some tax software, have a look at these charts below showing where the federal government gets all their taxes from, and where they spend it on.

image source:

In today’s reality it’s common practice to want the best education for our kids and the best health care for our elderly parents, despite whether or not we have the ability to afford it or not. So if a family is already in debt and is living paycheck to paycheck, what can they do to maintain their style of living? They borrow more money of course and dig deeper into debt, just so they can pay for those services with the hope that their financial situation will get better in the future. Sounds familiar?

Canada is in a similar situation. This country is in debt. And instead of saving money each year to pay off that debt it chooses to borrow even more money to continue paying for all it’s important federal services. Our teachers and nurses are being paid by borrowed money (a loan) that every future tax payer is on the hook for. It’s a fine balance between doing what’s best for our people now, VS what’s best for the future. I would personally like to see a balanced federal budget and will gladly pay more taxes, or receive less social benefits, or some combination of both. But I know not everyone would be on board with that. Fortunately our financial situation hasn’t hit a point of no return yet. But if we continue to spend more than we make then eventually, if nothing is done about it, we might find ourselves facing the same challenges as Greece is right now. The United States also has their own financial difficulties.