Internet and E-mail Safety (and security)

In this blog, let’s look more closely at internet and e-mail scams and security.

Knowledge is power – and never truer than when surfing the net. The most common risks are viruses, key-stroke recordings, miscellaneous malware and Trojan horses.

Viruses do the same thing to your computer as they do to us – they make it sick; they can even kill it. Key-stroke recording software is installed by hackers and allows them to record all of your keystrokes with particular attention to usernames and passwords – they love banking, credit card and email access the most. Malware is also malicious as it can take many forms: from tracking your internet use patterns to copying files to a remote computer to erasing key pieces of software. Trojan horses get uploaded and then sit in wait – silently for a triggering date or event and then allow the hackers to take control of your computer and use it for attacking other computers.

The only 100% protection against these threats is don’t surf the net! Now let’s get into reality – hardware and/or software firewalls together with anti-virus and anti-malware software.

Hardware firewalls are called routers and they act as a first line of defence between the internet and your computer and are relatively inexpensive to acquire and are not very complicated to install. Software firewalls are generally a second layer of protection after the hardware firewall. Most reputable commercial ISPs (Internet Service Providers) provide this as part of their customer offering and may reside either on their servers or on your computer.

Anti-virus and anti-malware software is sold by several companies (Norton, AVG, Kasperski, F-secure and MalwareBytes to name but a few). Most suppliers offer free versions of their protection suites but remember if it is free, there is a reason! They are in business to make money and the free versions are teasers only. They do help of course, but don’t provide complete protection, so beware of freebies! Running “in the background” on your computer, they analyse every attempt at both inbound and outbound communication over the internet for suspicious software code and either block or delete access to outsiders. You can control all of these functions through a “control panel” that is installed with this software.

Be very selective on the websites that you visit. Some categories are higher risk for spreading these problems than others – dating sites, erotic picture and video sites together social media are the greatest sources of problems – avoid them!

Rule No. 1 – if you don’t know the sender or you didn’t sign up for any e-mail notifications from stores or websites, DON’T OPEN IT! The “Nigeria” scams and grandchild scams are run constantly on e-mail as are Lottery scams of various types.
Rule No. 2 – see Rule No. 1.
Rule No. 3 – ensure you have a full-version of both anti-virus and anti-malware software installed on your computer that gets automatic signature updates – preferably daily – to stop evolving threats. If you follow these 3 rules, you are going to be safe 98% of the time.

The final 2% is chain-mail – the electronic version of old chain-letters – if you get one, regardless of the identity of the sender, do not forward it – even if it is from a close relative or friend – don’t!

A great reference book on scams is from the Competition Bureau of Canada – The Little Black Book of Scams – click here to get there immediately. The Canadian Anti-Fraud Centre has a website that is all about various scams and identity theft. Click here – Canadian Anti-Fraud Centre Home Page.

2012 Taxes – some quick reminders

With mid-December upon us, I wanted to just do some quick reminders for year-end!

a) Don’t go into debt on credit cards just because it is Christmas!
b) Tax Free Savings Accounts (TFSAs) – to use your 2012 allowable limit, you must contribute BEFORE December 31st, 2012. There is no 60-day grace period as there is with RRSPs and Spousal RRSPs. The TFSA limit increases for 2013 to $5,500.
c) Registered Educations Savings Plans (RESPs) – similar to TFSAs, there is no 60-day grace period to get your contribution into the plan for 2012 purposes and obtain the maximum Canada Education Savings Grant (CESG).
d) If you need to maximise your 2012 Medical Expense Claim, and need prescriptions refilled, glasses or contact lenses ordered or maybe hearing aids purchased – do them now before December 31st, 2012 or you won’t be able to use them for your 2012 tax return claim. Also consider any needed dental work.
e) Charitable donations also run on a calendar-year basis so mail those cheques now or do it on-line. Remember, once you have donated $200. in a tax year, the Federal Tax Credit on all donations in excess of $200. increase from 15% to 29%!
f) For those of us who are self-employed and are considering when to purchase software upgrades, software updates (for programs that are income-tax sensitive) or new hardware, consider purchasing them now – some very good deals are available and thy should count toward 2012 allowance business expense deductions. The same applies to car servicing or repairs that are due – including switching to your snow tires!
g) For students, pay for your 2013 tuition fees before the end of December and the deduction can be applied to your 2012 tax return – particularly if you have income from a part-time job.

Be happy, be safe and look forard to a happy and successful 2013! Cheers

Year-end Tax Planning – part 2!

Greetings once again – this next commentary will focus on some of the less well-known items on the list – starting with self-directed RESPs – Registered Education Savings Plans.

There are a few different types, but generically they typically invest in mutual funds, segregated funds (legally and correctly known as Individual Variable Insurance Contracts) or GICs/Term Deposits. Nothing fancy, but remember, the contribution period in order to potentially qualify for the CESG – Canadian Education Scholarship Grant – is on a calendar-year basis – no 60-day grace period as there is for RRSPs and Spousal RRSPs – it works the same as TFSAs – Tax Free Savings Accounts – calendar year deposits only.

If you are planning to make a contribution, a deposit to a plan of $2,500 should get you the annual maximum of $500 in CESG from Her Majesty. Miss it in 2012, you don’t get to “catch up” in 2013.

If the CESG is not an important factor for you, remember there is NO maximum age at which you can start a self-directed RESP! You can be 60 years of age and decide that on retirement you want to go back and get that lost BSc or MBA – you can use an RESP for yourself too!!

Switching now to self-employed people – regardless of industry – one of the key tax savings available to you is a Private Health Services Plan or PHSP. These are available through most financial advisors and you can contribute up to $1,500 per year (January 1st to December 31st – no 60-day grace period – and also not cumulative for missed deposits) for your-self, $1,500 for your spouse and $750 for each eligible dependent. Talk to an advisor to learn more about these interesting creatures – the potential benefits are very substantial!

Next for the self-employed are equipment purchases and software purchases. If you know you are going to need a new version of software for business purposes, but it now – you can generally claim the full amount as a deduction in the year of purchase if the cost is less than $1,000 (before taxes) – if more than $1,000, consult CRA tax bulletins to review write-off rates and duration.

The same applies to business equipment – if initial cost is less than $1,000, generally you can deduct it in the year of purchase – if more than $1,000, then it generally has to be amortised over a few years – again, refer to CRA bulletins or their website for more information.

For the rest of us, you may want to consider prepaying for Physical Education programs that qualify for the Fitness tax credit and getting your transit passes early if you can.

When in doubt – check with CRA via their website at or your tax preparer or accountant for other tips to maximise your deductions and tax credits! Cheers