The Canada Revenue Agency is the equivalent of the IRS in the states. Unlike the IRS, it tends to move forward with innovate tax solutions. Recently, it announced a new technique for finding people that owe back taxes. Yep, the program surfs the internet looking for posts made by the people that might lead the government to them. Canada is undertaking the program jointly with the tax agencies for the Netherlands, United Kingdom, Demark and Austria.

The program in question is called Xenon, not to be confused with Xena the warrior princess on television. The program works by taking the names of “missing” taxpayers and hunting for them on the net. It trolls through forums, porn sites, auction sites, gambling sites and just about anywhere someone might drop their name.

There are, of course, a couple of problems with the internet sweep approach. First off, most people don’t use their real names when posting given the threat of identity theft. Second, the issue of privacy rights certainly would seem to come up, particularly if the program hacks into protected membership areas. Nobody has any answers to these issues because it is not entirely clear how the program works. Still, you can expect some controversy in the future.

If you don’t live in Canada or these other countries, you are probably wondering why you should care about this at all. Well, citizens of the United States should be on alert. The IRS annually reports tax gaps of hundreds of billions of dollars. A good percentage of this is due to people that just stop paying taxes. The IRS does not have the manpower to track all of them down, but things could become much easier if a simple computer could do it for them. If this occurs, all heck is going to break out for a lot of people. Imagine bidding on stuff on EBay only to find your debit card and bank account have been frozen!

In truth, people that don’t pay taxes only have themselves to blame. Still, the idea of the government sweeping the web for information is a more than a little troubling.

Tags : Canada Mortgage, Canada Property, Canada's Tax

Investing on a rental property is a great way to earn and building wealth in business of real estate. It is a fixed income every month. Unknown to most, a rental property has several tax advantages.

-Tax deductions on rental property are in line with any business tax. Expenses for property maintenance are deductible. These expenses could include cleaning, landscaping and insurance.

-Your mortgage payments on your rental property are also tax deductible. The equity you put into the insurance grows tax-free.

-If your investment appreciates over the years, a tax-related benefit is that the appreciation is tax-free. If you buy a home in an amount of one-hundred thousand dollars and it appreciates to two-hundred thousand, the one-hundred thousand you enjoy is currently untaxed. The combination of appreciation and borrowing is also non-taxed. For example, if you purchase a property for one-hundred thousand dollars and it doubles, if you borrow two-hundred thousand against the property value, the amount you borrowed will not be taxed.

-Another tax benefit you could enjoy is the deductible expenses incurred in the course of your business. If your business is mostly on investing on real estate, you can be considered a real estate professional. The benefit you can get out of this is whatever real estate activities you do such as having a property rented will be considered as an active business rather than a passive one, meaning you can deduct any operating expenses from your tax.

-A government incentive called the phantom cash further benefits people in real estate. In it, the value of your building is divided by 27.5 years. You can then divide this amount from your annual tax due.

To explain this, here is an example:

A property bought at $40,000 divided by 27.5 = $1,455. You can deduct this amount from your taxable annual income. This excludes other deductions from your rental income.

- Tax Deferred Form 1031 allows you to sell your property with the intent of buying a higher priced one and not having to pay any capital gains tax. Form 1031 form allows a third party to hold your money until you invest it into another property of higher value. This allows you to upgrade your rental properties without having to pay taxes.

-In case of accumulated rental losses, these will enable you to boost your finances. If your losses have gone up to thousands, be sure to claim every single penny of tax deductions you are entitled. Take note that for every $1,000 expenses claim can give you $400 off your tax bill later on.

Tags : Credit Report, Mortgage, Property Tax