Showing posts with label tax refund. Show all posts
Showing posts with label tax refund. Show all posts
Thursday, June 7, 2012
A list of documents you need to gather
Can you imagine what would happen if you died and your beneficiaries didn’t know where to find your will? Or your money? To make sure this doesn’t happen to your family, always have the following key documents safely stored together in a place where they can easily be found:
1. Your will: Outlines who gets what when you die. It also appoints guardians for your underage children. Without a will, your assets will be divided according to provincial law, not your own wishes. Worse, your children might end up not living with the guardian of your choice.
2. A living will: Spells out how you want to be treated if you are unable to make decisions about your own health (i.e., whether you want to receive life-sustaining treatments like respiration or resuscitation or whether you want organs donated).
3. A power of attorney: Gives someone the power to make financial decisions for you in the event you’re no longer able to do so. Without this document, the courts will have to appoint a guardian to look after your affairs, and that can take a lot of time – and money. NOTE: You should ensure that there is a second signature on all of your bank accounts as well.
4. Proof of ownership: Gather together all documents that show you own your house, land, vehicles, stocks and any other assets. Without these, your family might not know what you own or be able to prove it.
5. Three years of tax returns: Tax returns give your executor a sense of the assets and finances that are part of your estate.
6. A list of bank accounts and safety deposit boxes: According to the Bank of Canada, there are approximately 1.3 million unclaimed balances in Canada worth some $465 million. You want your family to be able to find your money – show them where it is by listing all your accounts.
7. Stock certificates and savings bonds: Hang onto your investment account statements and store them safely with your certificates (if you have any on paper), so your family can easily determine exactly what you own.
8. Pension, retirement and annuity documents: Help your family access any remaining retirement benefits they are eligible for through your retirement plan. If you’re getting money from an annuity, the contract will help your beneficiaries understand what they are entitled to and from which company.
9. Insurance policies: You bought insurance so your loved ones would be financially covered when you die, so be sure to keep copies of all insurance-related documents on hand so your family will know what policies you have.
10. A list of your debts and loans: A list like this will ensure your family won’t end up having any unwanted surprises down the road, such as debts they did not know about.
11. Marriage licence and/or divorce papers: Legal proof of marriage and divorce can make it easier for the executor of your estate and for your family.
12. Your user names and passwords: With social media and online accounts becoming increasingly important, you want to be sure your loved ones will be able to access your accounts.
13. Contact information: Do you have a lawyer, financial planner, or other professionals who assist you.
Make sure that their names and contact information are also listed.
Review your list once a year to ensure that it’s kept up to date.
Sunday, April 1, 2012
Tax Tips
April 30, 2012 is the deadline to file your taxes if you're an employee and it is also the deadline for self employed people to make sure that the CRA has received full payment of their outstanding balance. Therefore, here are some tips to help you complete your tax filing. Please contact your accountant, tax preparer or the CRA if you have specific questions.
The CBC has listed 9 tips to save you money at tax time. Included are:
1. Be sure to take advantage of all income-splitting and pension sharing opportunities.
2. Don’t assume that you don’t need to bother filing a tax return because you have no income.
3. Be sure to transfer any unused credits – including Child Tax Credit, Tuition Credits and Donations.
4. Know the limits of using tax software or online tax filing programs.
5. Be sure to claim all eligible medical expenses. Note: only expenses that exceed the lesser of $2,052 or three per cent of net income can be claimed. But there’s a long list of expenses that qualify, so it’s often not too difficult to reach that threshold, especially for the lower income spouse.
6. Take advantage of the new tax credits – including:
a. non-refundable Children’s Arts Tax Credit – maximum of $75 per child
b. The Volunteer Firefighter’s Tax Credit
c. Family Caregiver Tax Credit – beginning next year
d. TFSAs – if you withdraw funds, they cannot be replaced until the following calendar year
e. Examination fees now qualify for the tuition tax credit
f. 2011 budget also loosened the restrictions on transferring investments held in one sibling’s Registered Education Savings Plans (RESP) to another sibling’s RESP
g. RDSP withdrawals no longer trigger refunds of grants and bonds paid in the last yen years if a doctor certifies that a plan recipient isn’t likely to survive for five years
7. Keep good records.
8. Be proactive with your taxes.
9. Be sure to report all T-slips.
For more information on these items – check out the original article .
The CBC has listed 9 tips to save you money at tax time. Included are:
1. Be sure to take advantage of all income-splitting and pension sharing opportunities.
2. Don’t assume that you don’t need to bother filing a tax return because you have no income.
3. Be sure to transfer any unused credits – including Child Tax Credit, Tuition Credits and Donations.
4. Know the limits of using tax software or online tax filing programs.
5. Be sure to claim all eligible medical expenses. Note: only expenses that exceed the lesser of $2,052 or three per cent of net income can be claimed. But there’s a long list of expenses that qualify, so it’s often not too difficult to reach that threshold, especially for the lower income spouse.
6. Take advantage of the new tax credits – including:
a. non-refundable Children’s Arts Tax Credit – maximum of $75 per child
b. The Volunteer Firefighter’s Tax Credit
c. Family Caregiver Tax Credit – beginning next year
d. TFSAs – if you withdraw funds, they cannot be replaced until the following calendar year
e. Examination fees now qualify for the tuition tax credit
f. 2011 budget also loosened the restrictions on transferring investments held in one sibling’s Registered Education Savings Plans (RESP) to another sibling’s RESP
g. RDSP withdrawals no longer trigger refunds of grants and bonds paid in the last yen years if a doctor certifies that a plan recipient isn’t likely to survive for five years
7. Keep good records.
8. Be proactive with your taxes.
9. Be sure to report all T-slips.
For more information on these items – check out the original article .
Sunday, February 5, 2012
Should I top up my RRSP?
I have had a number of my clients calling me the last few weeks asking if they should top up their RRSP this year. I thought that I would review the process I go through with them to determine what is best in each individual situation.
Question 1 – Do you carry a balance on your credit cards each month? Credit card debt is between 18 and 20 percent. If you are carrying a balance on credit cards, you are probably better off paying down this debt rather than putting money into your RRSP.
Question 2 – What is your marginal tax rate? The higher your marginal tax rate for 2011, the larger the tax refund you will get from putting money into your RRSP. In general –“ more bang for your buck” the more money you earn.
Question 3 – Are you likely to need the money in the next two or three years? If you are likely going to take the money out in the next few years – you should top up your TFSA (Tax Free Savings Account) first. In 2012, you can deposit a total of $20,000 if you do not already have a TFSA account. If you do have an account and have never taken money out of it, you need to subtract the amount of money you have already deposited from the $20,000. If you have taken money out, the calculation is more complex – give me a call.
Question 4 – Are you likely to be a first time home buyer in the next few years? The Home Buyers Plan (HBP) lets you “borrow” up to $25,000 from your RRSP to acquire a home in Canada to be used as your principal residence. (This money must be repaid over a 15 year period.) If you are planning on buying a first home and don’t have $25,000 in your RRSP, it may make sense to top up now.
Question 5 – How old are you? The longer the money remains inside the RRSP, the greater the compounding that will occur.
You get a tax break when you put money into an RRSP. The money grows tax free inside the plan. However, you do pay taxes when you withdraw the money – so you need to think about what your tax bracket is likely to be later.
Do you have additional questions? Give me a call and we can work out the numbers for you.
Question 1 – Do you carry a balance on your credit cards each month? Credit card debt is between 18 and 20 percent. If you are carrying a balance on credit cards, you are probably better off paying down this debt rather than putting money into your RRSP.
Question 2 – What is your marginal tax rate? The higher your marginal tax rate for 2011, the larger the tax refund you will get from putting money into your RRSP. In general –“ more bang for your buck” the more money you earn.
Question 3 – Are you likely to need the money in the next two or three years? If you are likely going to take the money out in the next few years – you should top up your TFSA (Tax Free Savings Account) first. In 2012, you can deposit a total of $20,000 if you do not already have a TFSA account. If you do have an account and have never taken money out of it, you need to subtract the amount of money you have already deposited from the $20,000. If you have taken money out, the calculation is more complex – give me a call.
Question 4 – Are you likely to be a first time home buyer in the next few years? The Home Buyers Plan (HBP) lets you “borrow” up to $25,000 from your RRSP to acquire a home in Canada to be used as your principal residence. (This money must be repaid over a 15 year period.) If you are planning on buying a first home and don’t have $25,000 in your RRSP, it may make sense to top up now.
Question 5 – How old are you? The longer the money remains inside the RRSP, the greater the compounding that will occur.
You get a tax break when you put money into an RRSP. The money grows tax free inside the plan. However, you do pay taxes when you withdraw the money – so you need to think about what your tax bracket is likely to be later.
Do you have additional questions? Give me a call and we can work out the numbers for you.
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.
Friday, April 22, 2011
Tax Time is Approaching
The deadline for filing your Canadian tax returns (unless you or your spouse owns a small business) is April 30th. The deadline for paying outstanding personal tax bill for everyone is April 30th. Have you started getting ready?
A couple of suggestions:
- Check your tax return for last year to make sure that you have included everything. I had a call from a client last week who did not receive his tax receipt for an RRSP contribution. (We’re assuming that it was lost in the mail.) It is your responsibility to file your taxes with the information from all of your slips.
- Even if you don't owe taxes, you should file your 2010 income tax return by April 30, 2011 to be eligible for some tax credits and benefits, such as the GST / HST tax credit, , the Canada Child Tax Benefit, the Universal Child Care Benefit, and the Children’s Fitness Tax Credit. I have a client (she’s a union employee and last year with all the odds and sods received almost $3000 back from the government. True, most was overpaid contributions.
- You can access your tax information on the Canada Revenue Agency web site using the My Account. This year, you will need a CRA user ID and password to use the service. If you don’t already have one, click on the No button to create one
Canada Revenue Agency lists a number of common ways Canadians can reduce their tax bill. Check it out.
If you have specific questions, perhaps I can help you out – or at the very least, steer you in the right direction.
A couple of suggestions:
- Check your tax return for last year to make sure that you have included everything. I had a call from a client last week who did not receive his tax receipt for an RRSP contribution. (We’re assuming that it was lost in the mail.) It is your responsibility to file your taxes with the information from all of your slips.
- Even if you don't owe taxes, you should file your 2010 income tax return by April 30, 2011 to be eligible for some tax credits and benefits, such as the GST / HST tax credit, , the Canada Child Tax Benefit, the Universal Child Care Benefit, and the Children’s Fitness Tax Credit. I have a client (she’s a union employee and last year with all the odds and sods received almost $3000 back from the government. True, most was overpaid contributions.
- You can access your tax information on the Canada Revenue Agency web site using the My Account. This year, you will need a CRA user ID and password to use the service. If you don’t already have one, click on the No button to create one
Canada Revenue Agency lists a number of common ways Canadians can reduce their tax bill. Check it out.
If you have specific questions, perhaps I can help you out – or at the very least, steer you in the right direction.
Wednesday, May 5, 2010
Five suggestions for what to do with your tax refund
Last year, the average Canadian got back approximately $1,400 on their 2008 income taxes.
Tina Di Vito, director, retirement strategies, BMO Financial Group, offers the following advice on how to make the most efficient use of your 2009 tax refund:
“Maximizing your 2010 income tax refund by contributing to your RRSP this year is always a good option,” says Di Vito.
“However, depending on your personal situation, there may be several ways to make the most efficient use of the money you get back. Meet with a financial planner to determine the best approach for you.”
Pay down RRSP loans
If you took out an investment loan to maximize your RRSP contribution and generated a larger refund, you should use your tax refunds to pay down the loan.
Pay down credit card debt
High interest on some credit cards can eat away at savings. Reduce the cost of credit by using your tax refund to reduce or pay down your credit card balances, targeting the highest rates first and transferring the balances to a lower rate credit card.
Lump sum mortgage payment
If you have a mortgage, it may be good idea to use your tax refund to make a lump sum payment. Applied directly to the principal, a lump some payment could save you thousands of dollars in interest costs over the life of the mortgage.
Top-up a TFSA
If you are not carrying any extra debt, contribute to a Tax-Free Savings Account (TFSA) to let you grow your money tax free. If you who maxed out your TFSA contribution in 2009 you have room for an additional $5,000 this year.
Save for education
Saving for a child’s education can be an expensive thing. Contributing to a Registered Education Savings Plan (RESP) can help alleviate some of the pressure that all parents feel when planning for their children’s future. If you have children, you should consider opening an RESP using their income tax refund. A $2,500 dollar contribution to an RESP can earn a $500 grant from the government. By maximizing contributions every year, you could earn up to $7,200 in grants for every child.
from BMO offers advice on how to maximize the return of tax refunds
Tina Di Vito, director, retirement strategies, BMO Financial Group, offers the following advice on how to make the most efficient use of your 2009 tax refund:
“Maximizing your 2010 income tax refund by contributing to your RRSP this year is always a good option,” says Di Vito.
“However, depending on your personal situation, there may be several ways to make the most efficient use of the money you get back. Meet with a financial planner to determine the best approach for you.”
Pay down RRSP loans
If you took out an investment loan to maximize your RRSP contribution and generated a larger refund, you should use your tax refunds to pay down the loan.
Pay down credit card debt
High interest on some credit cards can eat away at savings. Reduce the cost of credit by using your tax refund to reduce or pay down your credit card balances, targeting the highest rates first and transferring the balances to a lower rate credit card.
Lump sum mortgage payment
If you have a mortgage, it may be good idea to use your tax refund to make a lump sum payment. Applied directly to the principal, a lump some payment could save you thousands of dollars in interest costs over the life of the mortgage.
Top-up a TFSA
If you are not carrying any extra debt, contribute to a Tax-Free Savings Account (TFSA) to let you grow your money tax free. If you who maxed out your TFSA contribution in 2009 you have room for an additional $5,000 this year.
Save for education
Saving for a child’s education can be an expensive thing. Contributing to a Registered Education Savings Plan (RESP) can help alleviate some of the pressure that all parents feel when planning for their children’s future. If you have children, you should consider opening an RESP using their income tax refund. A $2,500 dollar contribution to an RESP can earn a $500 grant from the government. By maximizing contributions every year, you could earn up to $7,200 in grants for every child.
from BMO offers advice on how to maximize the return of tax refunds
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