Tax Tip: Manage Net Income for 2016

Who pays higher marginal tax rates: the executive earning $250,000, or the family that makes do on $60,000? If you said the family, you would be correct. That’s because marginal tax rates are higher in income brackets that are impacted by the clawback of social benefits and tax credits. But when does that happen? For most families, clawbacks start when family net income is around the $30,000 mark. But just how do you determine if your income is too high […]

Moving Soon? Keep Receipts for a Lucrative Deduction

If December is moving month for you, three pieces of advice: tax a deep breath, treat yourself to some extra eggnog, and keep those moving expense receipts handy. They will be worth a lot of money when you file your tax return. To be eligible, the move to your new home must be at least 40 km closer to the new work location than the old home. Generally the move must be within Canada, although students may claim moving expenses […]

Year-End Planning: Reviewing Taxpayer Rights On Appeal

The Auditor General for Canada has recently issued a report on CRA’s appeal process, focusing on whether CRA has been efficient in managing income tax objections. It’s important, says the report, because taxpayers have the right to impartial and timely review of their tax returns in order to avoid significant costs in time and resources when they disagree with CRA. The overall findings were interesting: The report found that CRA took too long to process income tax objectives, contributing to a […]

Millions Suffer From Hearing Loss: Year-End Tax Planning Can Help

According to a recently released study by Statistics Canada, people who are socially isolated are more likely to experience a poor quality of life, morbidity and mortality. Loss of hearing has a big part to play in creating that feeling of isolation, particularly for women. Tax and financial advisors can directly help address the issues with some year-end tax planning. The StatsCan study, by Pamela L. Ramage-Morin, points to some surprising findings based on the 2012-13 year: About 4.5 million […]

Eight Short Snappers: Quick Year-End Tax Planning Tips

There is still plenty of time to look for year-end planning strategies to reduce taxes in 2016 and start 2017 out on a tax-efficient foot. Tax and financial advisors who make time for a planning discussion with families at this time of year may wish to use this checklist of money savers: 1. Investors: Donate Securities. Check non-registered portfolios for securities showing accrued but unrealized gains. Capital gains can be avoided entirely when qualifying securities are transferred to your clients’ […]

Donations of Flow-Through Shares

This is the time of year that high net worth clients are looking for one more tax saving opportunity before year end. Donations of flow-through shares, commonly available from corporations in the oil & gas, mining and renewable energy sectors, will still be allowed. However, many tax and financial advisors will want to brush up on their knowledge of the subject first. Recall that under these arrangements, eligible exploration, development and project start-up expenses may be renounced by the corporation […]

Shore Up Your Tax Knowledge on Offshore Asset Reporting

Year end is a great time to re-engage clients in conversation about financial decision-making, especially for clients with offshore assets who may need to report some of them on Form T1135 Foreign Income Verification. Who must file Form T1135? Canadian residents who own assets abroad must submit a newly enhanced Form T1135 Foreign Income Verification to CRA to disclose whether they had “specified foreign assets” held during the year. The form is required if the total cost of the properties […]

Year-End Tax Secrets: Mutual Funds

Mutual funds are common investments but can often cause some tax confusion, particularly because investors don’t understand their real returns from these investments, after fees and taxes. Here’s the year-end tax secret: In some cases, there are unintended results that can push investors into a higher tax bracket than expected at the end of a tax year and make quarterly instalment remittances, and often interest payments for under-remitting, necessary. This is because mutual fund companies are required to distribute all […]

CPP Actuarial Report: Expected Return 3.9% to 2090

The 27th Actuarial Report on the Canada Pension Plan provides some fascinating reading about Canada’s demographics and economy over the next 75 years, to 2090. The average annual real rate of return on the fund is expected to be 3.9% in that period, and the report reassures that the current legislated contribution rate of 9.9% will be “more than sufficient” to cover expenditures to 2020, with up to 26% of investment income making up the difference between CPP contributions and […]

Beef Up Your 2017 Canada Child Benefit Now

It’s unclear whether Canadians are really getting more from their Canada Child Benefit in 2016 over the Universal Child Care Benefit and family income splitting. That’s the subject of our October poll. However, at this time of the year there is lots a tax specialist can do to make sure your family maximizes the credit. Here’s how the Canada Child Benefit works: First, it’s a refundable credit based on family net income. Specifically, the new Canada Child Benefit provides a […]