Giving gives back!
Your donations to CRA registered charities generate a 15% – 29% tax saving. Make sure to ask for an official receipt as you will not be refunded without it.
Public Transit pays off!
If you use public transit to get around, you and any eligible dependents that you have may be entitled to a 15% non-refundable tax credit. Environmentally friendly AND financially rewarding, public transport is taking you places!
Keep your receipts
No need to send your receipts when you NETFILE your tax return, although the CRA may send you a request later for:
• Medical expenses
• Charitable donations
• Child care expenses
• Spouse or child support payments
• Moving expenses
Use a big envelope or shoe box as your "official tax slip holder" and keep all tax related information there.
Save for retirement and save on your taxes!
If you invested in your RRSPs in 2011, your contributions are exempt from taxation as long as they stay in the plan. Invest early in the year to gain tax free interest on your investment and make your money work for you.
Important tax dates for tax season 2011
• Feb 13, 2012 – NETFILE Services are open
• Feb 29, 2012 - RRSP Deadline
• April 30, 2012 – Tax Filing Deadline
• June 15, 2012 – Self Employed Tax Filing Deadline
• September 30, 2012 – NETFILE services close for tax season 2011
Saturday, December 10, 2011
Sunday, December 4, 2011
Additional CPP Changes effective January 1, 2012
Several changes are taking effect on January 1, 2012 that may affect you. You will not be affected by these changes if you started receiving a CPP retirement pension before December 31, 2010, and you remain out of the work force.
If you are between 60 and 65, receiving CPP and still working, you and your employer now must contribute to CPP. The additional contributions will count towards a Post Retirement Benefit (PRB).
If you are between 65 and 70, receiving CPP and still working, you and your employer now have the option to contribute to CPP. The additional contributions will count towards a Post Retirement Benefit (PRB).
If you are between 60 and 70 and not yet collecting CPP, the adjustment factor that will be used will change. For those taking the benefit before December 31, 20110 the adjustment was 0.5% per month above or below age 65. This percentage will gradually increase to 0.7% per month for those taking late retirement and 0.6% for those taking early CPP . These changes will take full effect by 2016.
In addition, the number of years with zero earnings that are automatically dropped from the calculation of the CPP pension will increase.
Starting in 2012, contributors no longer have to stop working or significantly reduce earnings for two consecutive months to receive the CPP retirement pension before the age of 65. This will make it easier for Canadians to make a gradual transition to retirement.
For more information, you can check the Service Canada web site or give me a call.
Service Canada has a retirement calculator on their web site to assist you in calculating your benefit.
If you are between 60 and 65, receiving CPP and still working, you and your employer now must contribute to CPP. The additional contributions will count towards a Post Retirement Benefit (PRB).
If you are between 65 and 70, receiving CPP and still working, you and your employer now have the option to contribute to CPP. The additional contributions will count towards a Post Retirement Benefit (PRB).
If you are between 60 and 70 and not yet collecting CPP, the adjustment factor that will be used will change. For those taking the benefit before December 31, 20110 the adjustment was 0.5% per month above or below age 65. This percentage will gradually increase to 0.7% per month for those taking late retirement and 0.6% for those taking early CPP . These changes will take full effect by 2016.
In addition, the number of years with zero earnings that are automatically dropped from the calculation of the CPP pension will increase.
Starting in 2012, contributors no longer have to stop working or significantly reduce earnings for two consecutive months to receive the CPP retirement pension before the age of 65. This will make it easier for Canadians to make a gradual transition to retirement.
For more information, you can check the Service Canada web site or give me a call.
Service Canada has a retirement calculator on their web site to assist you in calculating your benefit.
Wednesday, November 16, 2011
2011 Tax Planning Tips
Tip 1 - Tax loss selling
The deadline for selling securities this year is December 23, 2011 if you need a tax loss to offset a capital gains realized earlier in 2011. Be mindful of the "superficial loss" rule when you sell an investment to realize the loss. If you buy the investment back within 30 days, the CRA can deny the loss and add it back to the adjusted cost base of the repurchased security.
Tip 2 - RRSPs / RRIFs / Annuities
Have you turned 71 in 2011? If so, you must convert your RRSP to a RRIF or an annuity before December 31, 2011. In addition, any final RRSP contribution must be done by December 31, 2011 as well. Talk to me, if you want to make an over contribution to your RRSP for this tax year.
TIP 3 - RESPs
If you have a child or grandchild who turned 15 in 2011, December 31, 2011 is the last chance to contribute to their RESP (if they do not have one already) and be able to collect the Canadian Education Savings Grant (CESG). The child must have a minimum of $2000 in their RESP by the end of the year they turn 15 in order to collect the government grants.
If you child is over 10 and you have unused RESP contribution room, consider making a contribution in 2011 to collect the CESG.
Tip 4 - Investment expenses and deductible interest
To deduct these expenses in 2011, they must actually be paid by December 31, 2011.
For more tax tips or clarification on these, give me a call.
Sunday, October 30, 2011
Canadian Debt Levels
The average Canadian had $1.49 of debt for every $1.00 they earned in the second quarter of 2011. (This debt includes mortgage and consumer loans.) Are you one of the many spending more than they earn? If so here are a couple of steps you should take to evaluate your spending / savings patterns.
The first step is to track your spending for a month – and yes, that includes all of the items that you buy with your spare change (such as coffee). Until you know what you spend your money on – it’s impossible to change your spending patterns. If you would like a template to track your money, let me know and I can send you one by email or snail mail.
Once you know what you’re spending your money on, you need to analyze your spending habits. Do you really need two Grande Starbucks Lattes every day?
You need to start paying down high interest debt. Start with your credit cards and take the money you’re no longer spending each month on frills and put that extra into your payments.
After each pay check – you need to arrange for a certain percent / amount to go directly into a savings vehicle – whether that’s an RESP, RRSP, TFSA or a Savings Account will vary depending on your financial plan. This is what your parents told you to do when you got your first job and it makes as much sense today as it did then.
Do you need help with any of these steps – give me a call and we can arrange to get together.
The first step is to track your spending for a month – and yes, that includes all of the items that you buy with your spare change (such as coffee). Until you know what you spend your money on – it’s impossible to change your spending patterns. If you would like a template to track your money, let me know and I can send you one by email or snail mail.
Once you know what you’re spending your money on, you need to analyze your spending habits. Do you really need two Grande Starbucks Lattes every day?
You need to start paying down high interest debt. Start with your credit cards and take the money you’re no longer spending each month on frills and put that extra into your payments.
After each pay check – you need to arrange for a certain percent / amount to go directly into a savings vehicle – whether that’s an RESP, RRSP, TFSA or a Savings Account will vary depending on your financial plan. This is what your parents told you to do when you got your first job and it makes as much sense today as it did then.
Do you need help with any of these steps – give me a call and we can arrange to get together.
Sunday, September 25, 2011
Keep on top of your money
Back in May 2009, I came up with a "Tweet" of a Financial Plan - Control debt. Review insurance to protect lifestyle. Monitor spending. Save. Be tax smart. Develop & audit plan. Update will. Review planRecently, I saw an article in the Toronto Star - Improve your finances in just 30 minutes.
Both can be summarized the same way - be organized, have a system in place and stick with it. We'd all like life to be easy and not have to think about money and the "what ifs", but unfortunately, that's not reality. So the real question is how do you take care of your finances for both the planned and unplanned expenses in life without the planning getting out of control.
The system I recommend is to set aside some time every week or month to do these tasks. When you receive your mail, put all of the financial related items into an envelope or file folder. Similarly, take all the receipts out of your pockets and wallet and put them into the envelope as well.
Sit down regularly to go through this package and to ensure:
· There are no mistakes / unexplained charges on any of your bills
· Have a file folder for receipts you need to keep - items you'll declare as expenses on your taxes, warranty items, bills for repairs, etc.
· Once you've matched receipts to your bills for items like groceries, discard them
I use software to keep track of my expenses. I download my statements directly from my financial institutions and categorize everything. This way, at tax time, I can run a report and have summary numbers for all of my expenses.
At the same time as you are reviewing your statements, pay your bills. Most on-line banking systems let you date a payment for the future. If you pay by check, write it out and have it ready for when you want to send it out.
At the same time, set up a monthly rotation to review ongoing expenses such as your home and car insurance, life insurance, saving plans (RRSP, RESP, TFSA, etc), budget, etc.
Using a system ensures that you use a minimum amount of time for these tasks, and that you don't have to worry again.
Both can be summarized the same way - be organized, have a system in place and stick with it. We'd all like life to be easy and not have to think about money and the "what ifs", but unfortunately, that's not reality. So the real question is how do you take care of your finances for both the planned and unplanned expenses in life without the planning getting out of control.
The system I recommend is to set aside some time every week or month to do these tasks. When you receive your mail, put all of the financial related items into an envelope or file folder. Similarly, take all the receipts out of your pockets and wallet and put them into the envelope as well.
Sit down regularly to go through this package and to ensure:
· There are no mistakes / unexplained charges on any of your bills
· Have a file folder for receipts you need to keep - items you'll declare as expenses on your taxes, warranty items, bills for repairs, etc.
· Once you've matched receipts to your bills for items like groceries, discard them
I use software to keep track of my expenses. I download my statements directly from my financial institutions and categorize everything. This way, at tax time, I can run a report and have summary numbers for all of my expenses.
At the same time as you are reviewing your statements, pay your bills. Most on-line banking systems let you date a payment for the future. If you pay by check, write it out and have it ready for when you want to send it out.
At the same time, set up a monthly rotation to review ongoing expenses such as your home and car insurance, life insurance, saving plans (RRSP, RESP, TFSA, etc), budget, etc.
Using a system ensures that you use a minimum amount of time for these tasks, and that you don't have to worry again.
Sunday, August 7, 2011
Making a claim on your insurance
This summer I have assisted several clients making an insurance claim. Like everything else in life, they seem to come in batches. While none were happy to be making a claim, they were all pleased to receive the insurance proceeds.
Life insurance claims are straight forward – the insurance company needs a death certificate and a claim form. The money in most cases is paid out in less than a month from when you notify me. In both cases this summer (even with a mail strike), I managed to deliver the checks to the beneficiaries in about 2 weeks.
Disability claims require more time and more paperwork. The client I am working with is an employee at one of the groups I insure. I was called as soon as he was off work. The employer and employee have completed their paperwork; we’re just waiting for the doctor to submit theirs.
Do you have long term disability coverage? If you’re an employee – look at your pay stub. If you show an amount deducted beside LTD – you have Long Term Disability coverage that probably starts if you’re off work for 17 weeks. If you have an amount listed besides WI (weekly Indemnity) or STD (Short Term Disability), then you have Short Term Disability as well. As opposed to health and dental benefits, disability only protects your income and not that of your spouse.
You should review your coverage whenever there’s a change in your life. Whether you require Life Insurance to protect your family, Critical Illness Insurance to receive a lump sum payment should you get a life threatening or life altering disease or Disability Insurance to pay you monthly while you are unable to work or a combination depends on your specific situation.
Give me a call. I’d be pleased to walk you through the calculations to determine how much insurance you need and what type meets your specific need.
Life insurance claims are straight forward – the insurance company needs a death certificate and a claim form. The money in most cases is paid out in less than a month from when you notify me. In both cases this summer (even with a mail strike), I managed to deliver the checks to the beneficiaries in about 2 weeks.
Disability claims require more time and more paperwork. The client I am working with is an employee at one of the groups I insure. I was called as soon as he was off work. The employer and employee have completed their paperwork; we’re just waiting for the doctor to submit theirs.
Do you have long term disability coverage? If you’re an employee – look at your pay stub. If you show an amount deducted beside LTD – you have Long Term Disability coverage that probably starts if you’re off work for 17 weeks. If you have an amount listed besides WI (weekly Indemnity) or STD (Short Term Disability), then you have Short Term Disability as well. As opposed to health and dental benefits, disability only protects your income and not that of your spouse.
You should review your coverage whenever there’s a change in your life. Whether you require Life Insurance to protect your family, Critical Illness Insurance to receive a lump sum payment should you get a life threatening or life altering disease or Disability Insurance to pay you monthly while you are unable to work or a combination depends on your specific situation.
Give me a call. I’d be pleased to walk you through the calculations to determine how much insurance you need and what type meets your specific need.
Thursday, August 4, 2011
The more things change, the more they stay the same
We've all heard this proverb and have all probably used it, but what does it mean in your everyday life?
This week, I went on line and bought tickets, posted pictures and checked bus schedules - all activities that a few years ago would have required phone calls and / or a trip out of my office to accomplish. I spoke to a friend half way around the world on Skype for nothing (versus the expensive long distance phone call of 15 years ago). I could go on - we all have examples from our day to day lives.
The fundamentals of financial and estate planning have not changed. We are all concerned that we might outlive our money or whether we can maintain our standard of living for ourselves and our families - no matter what happens. What have you done about this? Many people bury their head in the sand and hope that nothing serious happens. Some people have reviewed their plans with a professional and know what would happen if - and many of these people are pleased to learn that they are in a much better position than they thought they were in.
Would you like to be one of the people who knows for sure? I am offering a confidential, complementary review of your current situation along with suggestions on how to ensure that you can maintain your lifestyle - to my clients and readers of this newsletter
This week, I went on line and bought tickets, posted pictures and checked bus schedules - all activities that a few years ago would have required phone calls and / or a trip out of my office to accomplish. I spoke to a friend half way around the world on Skype for nothing (versus the expensive long distance phone call of 15 years ago). I could go on - we all have examples from our day to day lives.
The fundamentals of financial and estate planning have not changed. We are all concerned that we might outlive our money or whether we can maintain our standard of living for ourselves and our families - no matter what happens. What have you done about this? Many people bury their head in the sand and hope that nothing serious happens. Some people have reviewed their plans with a professional and know what would happen if - and many of these people are pleased to learn that they are in a much better position than they thought they were in.
Would you like to be one of the people who knows for sure? I am offering a confidential, complementary review of your current situation along with suggestions on how to ensure that you can maintain your lifestyle - to my clients and readers of this newsletter
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