Tax Credit and Tax Deduction

What Is The Difference Between A Tax Credit and A Tax Deduction?

First Published: November 5, 2009

Tax Deduction

A tax deduction is an amount of money which lowers your taxable income.

Tax deductions reduce taxable income.

Tax deductions may make your taxable income zero by exceeding your employment income.

Tax deductions reduce more taxes for those who are in higher tax brackets than for lower tax brackets.

If you live in Ontario and in the highest federal tax bracket (29%), your federal and provincial combined marginal tax rate is 46.41% – as of 2009. If you have $100 tax deduction = you will save $46.41 in tax. If you are in a lower bracket, you will receive less savings.

Tax deduction examples: RRSPs, Childcare expenses, Capital losses, Moving expenses.

Tax Credit (Non-Refundable)

A tax credit is a dollar for dollar deduction which is subtracted from the amount of tax you pay.

Tax credits lower taxes payable at the lowest tax rate

Tax credits may not make your taxable income zero because it only reduces taxes payable at the lowest tax rate.

Tax credits are fixed amounts, so they reduce same monetary value to all taxpayers – if you have enough taxable income to make the deduction.

Tax credits are calculated based on the lowest federal and provincial tax rates. For 2009, lowest federal and provincial rates are 15% and 6.05% (Ontario). Therefore, if you have $100 tax credit, you will save $15 + $6.05 = Total $21.05 – regardless of tax bracket.

Tax credit examples: Medical expenses, Eligible dependent, public transit credit, Caregiver amount, Tuition and education amount, Charitable donations.

Tax Deduction or Tax Credit – which one is better? The answer can be a tricky one and it may not as simple as it looks. In general, tax deduction seems to favour the higher income group, but I would suggest you to consult a tax professional. For more Info,
please visit – Canada Revenue Website.

The Continuous Depletion of Time Account

Do Not Waste Your Most Valuable Resource – Time. The One-Shot Supply of This Mostly Precious Asset Should Not Be Taken As Granted 

When we were born, we all started with one-time supply of our time on earth. If you consider your first day on earth as Day 1 and assume you will live up to 100 years of age, here is what you have:

100 years X 365 days = 36500 days X 24 Hours = 876,000 hours.

These numbers are the same for everyone. Whether we are old or young, black or white, religious or atheist, the world’s richest person or the world’s poorest person, all of us have the same amount of time to waste and to utilize. Time is neutral, does not discriminate, and does not treat anyone unfairly.  

The moment you were born, you started depleting your time account. Although some of us may live longer than others, but we can’t stretch time beyond our mortality. Think of time as your bank account where you have 876,000 units (or more or less depending on how long you live) deposited for you only once. There is no way you will be able to deposit more units or manipulate your account to inflate your units.

Yet, most of us take this most valuable and precious resource for granted and keep wasting it till the day when we have nothing left in our time bank account. The difference between a successful person and failed person in every aspect of time is the results of how successfully or poorly each utilized their time.

Let me give you some examples of how poorly we waste our time which can never be deposited back into our time account. These examples are hilarious and sad at the same time, as we failed to value our most precious resource, “Time”, which can never be recovered.

- Driving hours to save $10 
- Standing in long lines and wasting hours to get free stuff 
- Sleeping away the whole afternoon 
- Buying and then returning something many times and spending endless hours doing so 
- Spending hours watching useless TV channels like talk shows and reality shows 
- Spending unproductive hours online on sites like Facebook, YouTube, etc.

These examples can go on and on. But you should have an idea already how people are endlessly wasting time without realising what they are doing.

Stop the leakage of your most valuable asset – your time. Consider every moment of your time is precious and understand that it will never be regained. Utilize each unit of time properly and in productive ways. Lifetime success and happiness will be upon you if you can successfully manage and use each and every unit. Time is what makes the difference between a winner and a loser. Don’t wait for that moment to regret when you will have only the last remaining units in your time account.

Auckland Sky Tower | Auckland Travel Blog

New Zealand Travel Blog: Part 14

After the boat cruise tour, I was waiting in the area where someone from our tour company would pick me up. I didn’t have to wait long; I found the guide right after exiting the boat. The tour van took me and some other people on the same tour to the Sky Tower entrance, which was just a few minutes drive.

The tour guide gave us tickets and left us in front of the tower. We were to visit the Sky Tower and return to our hotels on our own. It made sense because I didn’t have to rush and could take my time to see everything. My hotel was just a few blocks from the tower.

The iconic Sky Tower is 328 meters (1076 ft) high and the tallest freestanding structure in the southern hemisphere. The Sky Tower is the 25th tallest tower in the world and defines Auckland’s skyline because of its height and shape.

The views were breathtaking. Having water surrounding Auckland made everything even more scenic. It offers unobstructed views of Auckland, volcanoes, and the water bodies surrounding the harbours. 

There are restaurants (some of which are revolving), cafes, ice cream shops, gift shops, casinos, and many other establishments located in the tower. However, I was busy only concentrating on the views from various angles and taking lots of videos and pictures.

The observation deck and general areas didn’t feel overcrowded at that time – which was a blessing for me. I asked a few other people to take my picture when I wanted to be in the pictures. Lots of friendly tourists were glad to help.

After finishing the Sky Tower, I walked to my hotel. My flight to Sydney would be the next day, but in the evening. So I didn’t have to rush and even would have time to walk downtown tomorrow.

New Zealand Travel Blog: Part 1

New Zealand Travel Blog: Part 2

New Zealand Travel Blog: Part 3

New Zealand Travel Blog: Part 4

New Zealand Travel Blog: Part 5

New Zealand Travel Blog: Part 6

New Zealand Travel Blog: Part 7

New Zealand Travel Blog: Part 8

New Zealand Travel Blog: Part 9

New Zealand Travel Blog: Part 10

New Zealand Travel Blog: Part 11

New Zealand Travel Blog: Part 12

New Zealand Travel Blog: Part 13

How to Make Instant Noodles A Healthy Food

Instant Noodles Are Very Unhealthy 

Instant doodles, instant ramen, cup noodles – these are all very unhealthy foods. Manufacturers deep fry them in bad oil (like palm oil) and that’s where all the bad fats (trans fat, saturated fat) come from. Then, these noodles have to be wax coated (the same material they use in Styrofoam containers) so they don’t stick to each other when cooking. And don’t forget about the seasoning or small flavour packets that come with instant noodles. These powders are full of bad stuff such as salt, MSG, fat, and who knows what else!

However, after packing instant noodles with all these bad things, I realise that you may need to eat it once in a while – and that’s OK as long as you are not eating instant noodles frequently. Even if you eat instant noodles once in a while, you can do a few simple things to make it a healthy meal better than just eating only noodles.

Steps to Make a Healthy Bowl of Instant Noodles 

1. Gather some vegetables and cut them in small pieces. 
2. Here are some veggie suggestions. Pick all or some from these based on what you like: Broccoli, Celery, green beans, carrots, tomatoes, little bit of garlic, and any other vegetables you may like. 
3. Boil the required amount of water and add a teaspoon of olive oil. 
4. Throw in your vegetables. 
5. Boil for 3 to 5 minutes. 
6. Throw in noodles. 
7. Cut down on seasoning or flavour packets by adding only half amount. 
8. Boil for 3 to 5 minutes. 
9. You are done.

When it comes to eating, you have the option to make it a healthy one or a junk one. Be careful and selective on what you eat and live a happier and a longer life.

How To Use Canada Revenue Agency Website

Canada Revenue Agency Website

First Published: Nov 9, 2009

Canada Revenue Agency (CRA) Website provides tax related information, publications, guides, forms, and other services that educate general public and promote compliance with Canada’s Tax system. CRA website has a vast amount of information, and it can be overwhelming. Here is a video clip showing how to easily navigate throughout CRA website and find tax information you need quickly and efficiently.