Counting Losses Counts For Cash

Disciplined investors sell at the top of a cycle and buy at the bottom.  Smart ones also pause and plan at this time of the year,  crystallizing losses deliberately before year end to get the desired tax results. How do capital losses impact your tax return?  Lucratively. Capital losses incurred when capital assets are disposed of,  first reduce or cancel out this year’s capital gains.  After this, unabsorbed losses can be used to reach back to recover taxes paid on […]

Kick Start 2015 Financial Plans

First the bad news. The rules behind the very least you could possibly pay as a household are very complicated. Despite all hype around the $5Billion the new Family Tax Cuts and additional provisions promise to eligible households, it’s going to be up to the taxpayer to navigate the new tax return, file accurately and to the family’s optimal benefit. Now the good news, in case you missed it: there’s $5 Billion of tax goodies up for grabs and there […]

Maximum CPP Premiums for Self-Employed Close to $5000

The CRA has announced the maximum CPP pensionable earnings for 2015: $53,600 up from $52,500 in 2014. The premium rate of 9.9% (employer and employee) and basic exemption ($3500) remain the same as last year. What this all means in real dollar terms is that the maximum premium is going up again; this time to $2,479.95 for each the employer and employee. If you are self employed, you pay both portions, so for you, the maximum contribution to the CPP […]

Scary: Financial Literacy at CRA

It’s Halloween week and Financial Literacy Month is just around the corner, right after the ghosts and goblins visit. Just in time too, because it turns out it’s not just your imagination: communications from CRA are somewhat ghoulish. It’s been confirmed by New York consulting firm, Siegelvision, which was paid $25,000 by CRA to check up on the clarity of its communications with taxpayers. It found: “information (from the CRA) was not well organized, presentation of information did not inspire […]

Ancient Tax Law Important in Family Cottage Succession

Tax and financial advisors should make an effort to review their clients adjusted cost base records as part of the annual Year-End Tax Planning routines now ’til the end of the year, especially if the family owns a taxable cottage property. Ancient tax law is important in these cases. Dating back 20 years to February 22, 1994, digging out the Capital Gains Election form could save tens of thousands of dollars on an actual or deemed disposition, which can happen […]

At Year End, Increase Investment Returns with Tax Planning

Tax planning is about what you keep to live your happy life with. It’s too bad so many people miss out by failing to think about year end tax planning in the family. Understanding your lifetime tax obligation is an important motivator because it will help you understand the magnitude of tax savings possible. Consider this reality check: Find the amount of taxes you paid last year on Line 435 of your tax return. Now multiply that figure by an […]

Income Splitting for Canadian Families

Income splitting and higher limits to TFSAs could make a big difference in Real Wealth Management™ for Canadians families, reducing tax on income both today and in the future when retirement income is drawn completely tax free. It will all depend on how the final legislation is written and whether the government is elected to implement the plan. But because this is an election issue, it’s important that the significance of the potential double gift – income splitting and new […]

Family Lifecycle Planning Leads to Tax Savings

Birth, marriage, death, separation or divorce, university entrance, sale of business, unemployment, illness, career change, self-employment, inheritances, even certain birthdays — all of these life events can have tax consequences. Yet many taxpayers miss significant tax saving opportunities because they don’t keep their advisors informed about personal change. Whenever possible, taxpayers and their advisors should get together before personal milestones occur to discuss their tax consequences. Become familiar with the events that can influence your taxes. Embrace a process of […]

How to Postpone Your OAS

As of July 2013, OAS recipients can elect to defer taking their OAS pension for up to five years. This would provide for a larger pension then. For those who have already started to receive their Old Age Security, you must make the decision to defer within 6 months of your start date. After this, you can’t change your mind and decide to defer your pension. But if you have already started receiving your OAS and are in the first […]

Retirees Need Help Understanding Public Pensions

People can retire at any age, but it is increasingly rare for people to simply go from earning income from employment or self-employment directly to withdrawing income from investments and other sources including pensions. After the financial crisis, and as a result of changing demographics, most people will continue to work well into their 60s and possibly 70s, if they can maintain their health. Close to five million Canadians are reporting Old Age Security (OAS) income today, and over six […]