STOCK COUPONS - (Promotional Offer Codes, Investment Tips, and Reviews)

$50 FREE REBATE @ Questrade
HOW-TO INSTRUCTIONS GUIDE

Input the above promotional offer code (colored in red) into the “Offer Code” input box when signing up for a new account at Questrade.com. Enjoy your FREE $50!

Exchange-Traded Funds (ETF) are investment funds that trade just like stocks on stock exchanges. Like Mutual Funds, ETFs contain a basket of securities such as bonds or stocks, but for the most part ETFs commonly track an index like NASDAQ. ETF combines the valuation feature of mutual funds with the trading style of closed-ended funds, trading throughout the intraday at a price that may not reflect its underlying net asset value. Mutual funds transactions are settled at the end of the day price with the fund company.

ETFs have always been exalted for their extensive flexibility and cheap alternative to mutual funds. Although most mutual funds are actively managed, which contributes to their higher fees, when one were to take that into consideration ETFs still are much cheaper to own. Mutual funds are likely also to include trailer fees which are commissions paid by fund companies to brokers/dealers as compensation for their advice and distribution channels.

Although ETFs unquestionably have lower fees they do however have to deal with brokerage commissions any time they are bought and sold whereas mutual funds are not dealt this way. So if you are an active trader then these constant trade commissions for buying/selling ETFs can add up tremendously throughout a year and might out way any savings you may have had over mutual funds.

ETFs carry better tax benefits. Because they do not comprise actual shares of the underlying stocks as mutual fund units do, ETF shares are acquired by authorized reps in exchange for its stock basket which then get distributed as ETF shares on the open market. This simplified process makes selling of ETF shares not involve the selling of its underlying stock. When mutual fund units are bought/sold underlying shares of stock are also bought/sold and a taxable event occurs. This type of structuring reduces taxes but also reduces the amount of potential capital gains for ETF shareholders.

So when you look at both types of funds you can understand why the two exist. They both have their advantages and disadvantages. If you are still having a hard time deciding then we recommend you seek out a financial advisor to determine which type is best for your needs.

$50 FREE REBATE @ Questrade
HOW-TO INSTRUCTIONS GUIDE

Input the above promotional offer code (colored in red) into the “Offer Code” input box when signing up for a new account at Questrade.com. Enjoy your FREE $50!

All businesses like to save money and provide the most benefits to its employees without breaking the bank in the process. One of those perks of owning a business is being eligible to make use of what is called a PHSP. A Private Health Services Plan is a tax benefit by the government of Canada giving small businesses a way to claim health expenses as business expenses for its employees. These tax reliefs, when passed to employees, make medical expenses tax-free at a significantly larger level than many other avenues.

Normally people like to claim medical expenses on their personal tax return forms each year, however, because of a pre-set threshold that must be crossed (currently $2,000) and that only the amount above this threshold is eligible for tax credits, there is the less attractive idea that the remaining amount is taxed at the lowest marginal tax rate for that year. In other words, the savings you get from the standard personal medical expense claim is not that much.

By being an owner of a small business and having a PHSP established one can deduct health expenses without expensive and complicated health insurance plans. PHSP coverage applies to employees, their spouses, and any other member of a household.

Although it is very easy to mistakenly think that a PHSP is a form of health insurance it is very different. A PHSP is a tax method that makes health expenses into business expenses while health insurance is burdened by monthly premiums charged to all plan holders so as to distribute risk even when you don’t make a claim. Health insurance can also have different levels of coverage that is linked to expense. — the more coverage and the higher the risk tends to be more expensive to the claimant.

PHSP and health insurance can be combined but most people and businesses choose to rely on health plans for catastrophic events and PHSP for routine coverage.

Sole Proprietorships and partnerships have set limits that can be claimed per year. For the owner, his/her spouse, and member of the family it is $1,500/year per person. Household members under the age of 18 have a claim limit of $750 each. Incorporated businesses do not have any yearly limits.

PHSP covers all of the Canada Revenue Agency’s list of eligible health services which include dental, chiropractor, and many others. It is the same services as what is made available for the medical expense tax credit for personal income taxes.

PHSPs have no monthly premiums; you only pay a nominal fee when you file your claim. In other words, a PHSP is a pay-as-you-go service.

There is no reason why any business (corporations, sole proprietorships, and partnerships) shouldn’t have a PHSP. They are inexpensive and provide full health coverage to all employees with the key benefit of being 100% tax deductible.

$50 FREE REBATE @ Questrade
HOW-TO INSTRUCTIONS GUIDE

Input the above promotional offer code (colored in red) into the “Offer Code” input box when signing up for a new account at Questrade.com. Enjoy your FREE $50!

Many investors like to either start their own business, or invest into a new startup here in Canada and when one does so there are three major types of business ownerships: sole proprietorship, corporation, and partnership. Each have their pros and cons that should be analyzed in turn.

Sole Proprietorship is the most basic form of business which is owned and operated by a single person under one’s own name or as a registered name. Sole Proprietorship business names do not have any extension appended to the end of it like you see for other legal entities such as corporations with “Inc.” or “Corp.”. Setting up and managing this type of business is relatively easy and inexpensive. There are subtle differences in how this type is setup from province to province. Filing taxes as a sole proprietor is also much simpler by way of including your business income on your personal income tax form. One major disadvantage of this business type is that you are wholly responsible legally for debts and liabilities you may incur during its existence.

Partnerships come in three forms: General, Limited and Limited Liability. When you choose to start a business with a partner(s) it’s usually this type of business you look to form. General Partnerships are the most popular of the three and each partner is liable for all debts. Limited Partnership restricts one’s personal liability to how much they had originally invested in the company. A limited partner also cannot be involved in the management aspect of the business. If one does then they instead become a general partner. Limited Liability Partnerships are strictly limited to certain types of professions such as lawyers and accountants. Partnerships have the same tax simplicity awarded to sole proprietorships where each partner files information on their own personal income tax forms. One significant disadvantage with partnerships is that situations between partners can become strained due to different viewpoints and beliefs in how the business should operate, and on how to dissolve it.

Because the amount of personal liability is significant when structured as a sole proprietorship or partnership one can look to becoming incorporated as an alternative. A corporation is separate and distinct from its founders and shareholders. No individual can be held responsible for debts or obligations carried by the company. Establishing a corporation can be very expensive and difficult to set up. Tax filings are also much more complicated and have more strict deadlines to meet.

Whichever type of entity you choose always make sure you are fully aware of its benefits and its shortfalls so that your new business can flourish in the best possible way.