The Canada Revenue Agency (CRA) is well known for being more of a taker and less of a giver. After all, the whole purpose is to collect taxes. But taxes for what?
Those taxes certainly go towards our everyday lives and supporting those who need more support than others. However, just because you think you’re being left out doesn’t mean you actually are.
That’s why the CRA doesn’t make it quite so obvious when it comes to one major hack that could save you thousands each year.
Meet your benefits finder
Have you ever stared at your income tax return and wondered if there are benefits and credits you could apply for? Now, you won’t have to worry anymore. Canadians have access to the “Benefits Finder,” a program that does exactly what it states: finds you benefits to apply for.
After simply answering some questions, the finder will spew out all (if any) benefits that you can apply for. For example, let’s say you’re a 34-year-old mother of two who lives in Ontario. You’ll then answer all questions, providing more information, and it will tell you the benefits you can apply for.
In this example, there were a whopping 22 benefits that this person could apply for. Granted, the eligibility requirements aren’t likely to be met for every single one. But even two or three of these benefits could bring in thousands in income — especially if you’re a parent in need of child care, in this example.
What to do with that extra cash
What’s also great about the Benefits Finder is it varies when it comes to credits or benefits. Benefits are payments by the government that you can receive throughout the year. Credits are those that will be applied to your tax return. So, you could receive cash throughout the year but also get a lump sum come tax time!
So, what do you do with all this cash? Since you’re here at Motley Fool, I’m sure you know the answer should be to invest it! But not just anywhere. If you’re new to investing, I suggest three things. First, open a Tax-Free Savings Account (TFSA). This will ensure all income that you make from investments are tax-free. Then, put automated contributions towards your TFSA based on your household budget. Finally, put that cash aside until you have three to six months of income.
By doing this, you’ll not only be saving money; you’ll be creating cash in the case of an emergency. Emergencies can often be funded at least in part by this Benefits Finder as well, but perhaps not totally. That’s why investing to count on yourself can be a strong option.
A stock to consider
If you’re looking to create safe cash from your benefits income or simply from your budget, then look for blue-chip companies. These are valuable companies that have long histories of growth and creating income. That income is often distributed to investors through dividends. This provides you with even more cash to have on hand or even reinvest.
Right now, a strong option to consider is Fortis (TSX:FTS). Fortis stock offers investors access to the utility sector, a stable industry that’s only growing. That’s especially true for Fortis stock, which tends to expand through acquisitions, using its revenue to grow its dividend and acquire more business.
What’s more, it’s now a Dividend King, with 50 years of consecutive dividend growth as of its next payment in November. So, you can look forward to its current dividend yield of 4.38% only growing from here.
