Newsletter Archive

August, 2017 - Bill Morneau Discussion Paper: Update #4

Dear TPC Financial Group Ltd. clients, associates, and other interested professionals,

As part of our commitment to professionals and business owners across Canada, our office has been doing our best to keep all parties informed of ongoing developments related to Bill Morneau’s proposed tax changes, as well as to help spread information to the general public about the impact of these changes.

CASE STUDY #2

The finance minister has presented small business owners and professionals as tax avoiders who are exploiting perceived “loopholes” in the system.

In last week’s case study, our office outlined how a younger dentist would be impacted by the income splitting restrictions proposed by Morneau.

For our current case study, we have provided an account of how these changes would impact investment […]

August, 2017 - Bill Morneau’s Discussion Paper: Update #3

TPC Financial Group Ltd. is committed to keeping all impacted individuals informed of new developments related to Bill Morneau’s proposed tax changes. As you are likely aware, the changes relate to perceived tax “loopholes” that are being used by professionals and small business owners across Canada. The proposed changes look to address the following items:

Income splitting with family members.
Passive investment income within corporations.
Manipulation of income into capital gains.

The general consensus amongst industry experts is that if the proposed changes are implemented, legislation relating to income splitting and passive investment income will not be retroactive and would be implemented starting January 1st, 2018. In this respect, no immediate action should be taken in anticipation of these changes.

Once the result of the […]

August, 2017 - Bill Morneau’s Discussion Paper: Update #2

As discussed in our previous newsletters, our office is committed to keeping all clients and associates informed of the proposed changes set forth in federal Finance Minister Bill Morneau’s discussion paper.

The proposed changes stand to impact professionals at all stages of their careers, and without a strong and unified response from those potentially affected, there stands a greater chance of the proposals being passed as legislation.

In order to make advocacy more accessible for professionals who are already pressed for time, our office has prepared a letter that can be forwarded to your local Member of Parliament. This letter outlines many of the challenges that are faced by individuals in your situation, and urges your MP to take action against the proposed legislation.

The letter […]

July, 2017 - Bill Morneau’s Discussion Paper: Update #1

To TPC Financial Group Ltd. clients, associates, and other interested professionals,

As you are aware, on July 18th Finance Minister Bill Morneau proposed changes with regards to tax legislation around perceived “loopholes” in the system. These changes would specifically target individuals that they deem high-income earners and individuals with corporations or small businesses.

The changes are centered around three tax minimization strategies that the Liberal government is hoping to restrict: income splitting with family members, passive investment income within corporations, and manipulation of income into capital gains.

While restricting the conversion of business income into capital gains is a well-intentioned and level-headed response to legitimate tax avoidance, eliminating the last remaining tax benefits for business owners is senseless and illogical.

As advocates for professionals […]

July, 2017 - Bill Morneau: Proposed Tax Changes

Toronto,Canada- June 27, 2016: Bill Morneau, Canadian Minister of Finance.

As you may be aware, Bill Morneau, the federal finance minister, made an announcement today that the federal government is proposing to make three tax changes to target what they perceive to be “loopholes” in the system. These changes would specifically target individuals that they deem high-income earners and individuals with corporations or small businesses. The announcement has to do with the discussion paper that they indicated was coming this summer when they released their federal budget back in March.

The first of the three specific changes has to do with income splitting, or “income sprinkling” described by Mr. Morneau. More specifically, the splitting of income with family members that are […]

March, 2017 - Federal Budget 2017: Highlights

 

Please note the Budget did not propose many changes to the Federal Income Tax laws.  The Federal personal income tax rates remain unchanged.  In addition, both the Federal general and small business corporate income tax rates remain unchanged.

There will be discussion papers regarding income sprinkling to family members, as well as corporately held portfolios, yet nothing definitive has been released at this time.

There were some relatively minor changes made to the Federal tax laws. The following is a brief summary of some of the tax measures that will impact some of our clients that were introduced by the Federal Finance Minister Bill Morneau on March 22, 2017.

Public Transit Tax Credit

The budget eliminates the public transit tax credit effective July 1, […]

February, 2017 - Important Filing Deadlines for 2016

Please keep the following dates in mind as tax season approaches.  If you have any questions, please contact the office – we’re glad to be of assistance.

2016 RRSP Contribution Deadline:  March 1, 2017

Please be aware that if you want to deduct RRSP contributions on your 2016 income tax return, they must be done by March 1st of 2017.

T4 Slips for Employment Income

Corporations must file and issue T4 slips to its employees by February 28, 2017.  Even if you are not incorporated and have an employee, the T4 deadline is still February 28, 2017.  For example if you employ a nanny, you have to file by February 28th.

T3 and T5 Slips for Investment Income and Dividends paid to Owners

Corporations must file […]

January, 2017 - New Principal Residence Reporting Rules

On October 3, 2016, the federal government announced an important administrative change for reporting the sales of principal residences.

Previously, the government’s administrative position was that you did not have to report the sale of your home (on your income tax return) as long as you lived in it as your principal place of residence for the entire time you owned the home.

Beginning with the 2016 income tax year, all Canadians will be required to report the sale of their homes on their personal income tax returns. This will apply to all sales of homes (real estate), regardless of whether it was your principal residence or not.
It’s important to know that if the property was, in fact, your principal residence during […]

March, 2016 - Federal Budget

Leading up to the release of the 2016 budget, there was much talk about whether or not the new Liberal government would implement changes that would impact the income splitting opportunities for small businesses.  This had the potential to greatly impact a large number of professionals across Canada, and a large portion of TPC Financials’ clients. We are happy to announce that no changes were made to the income splitting opportunities for small businesses. Further, the changes that were announced in the budget are not as substantial as was expected by a number of advisors across Canada. While the budget addressed a number of different changes, we have outlined some items that we found to be the most […]

- Things you should consider if you’re a U.S. Citizen or Green Card Holder

Things you should consider if you’re a U.S. Citizen or Green Card Holder

On February 19th 2016, I attended a seminar in Victoria put on by Moodys Gartner Tax Law; the subject was “Renouncing Your U.S. Citizenship”.

I realize that most of you are not U.S. citizens (dual or otherwise), but we do have a number of clients who are, and many of you know someone who is. For those of you who are interested, here are a few things I found out:

Most people know that if you’re born on U.S. soil, you’re automatically a U.S. citizen. If you happen to move to Canada after birth your Canadian Passport will be issued indicating that your place […]

February, 2016 - Important Dates

Important Dates

Please keep the following dates in mind as tax season approaches. If you have any questions, please contact the office – we’re glad to be of assistance.

2015 RRSP Contribution Deadline: February 29

2016 is a leap year, so please be aware that this year’s RRSP contribution deadline is February 29 if you want to deduct the contribution on your 2015 return.

T4 Slips for Employment Income

Corporations must file and issue T4 slips by February 29. If you are paying a nanny personally, you must also file and issue the T4 by February 29.

T3 & T5 Slips for Investment Income

Corporations must file and issue T5 slips by February 29, while T3 slips must be filed and issued by […]

December, 2015 - Do You Need a New Will?

New legislation taking effect January 1st, 2016 will affect the taxation of testamentary trusts and could eliminate any benefit to including one in your will; however, before you go out and re-write your Will let’s make sure that you actually need to.

In case you’re unfamiliar with a testamentary trust, it’s defined as a trust which arises upon the death of the testator (this is the person who’s will it is). The trust is outlined within the will and the will itself acts as the trust document for administrative purposes.

One of the more common types of testamentary trusts is a spousal trust.

Under the old rules, testamentary trusts had the benefit of their own set of graduated marginal tax rates. If the […]

November, 2015 - Power of Attorney for Personal Care

Who Makes Health Decisions if You Can’t?

Would you like having your ex-spouse making decisions about you living or dying?

I recently read an article in the Wealth Professional written by Nicolas Hefferman titled “Lamar Odom tragedy highlights importance of living wills.” What struck me was that the comatose former NBA star’s ex-wife, Khloe Kardashian, was responsible for making his medical decisions.

Terminology is different between the United States and Canada, and a living will does not carry the same meaning in Canada. In Canada, each province has a specific document that affords an individual the ability to make health care decisions in the event of an individual’s incapacitation. In Ontario, this document is known as a power of attorney for personal care, a […]

May, 2015 - 2015 Federal Budget Highlights

As many of you may have heard, Finance Minister Joe Oliver announced the government’s 2015 pre-election federal budget on April 21st, 2015. In review of the changes put forth in this budget, there are a few items that are relevant to a number of our clients that we would like to take the opportunity to review:

TFSA Limits

One of the changes that impacts all Canadian taxpayers was the increase to the annual TFSA contribution limit from $5,500 per year to $10,000. This increase will take effect for the 2015 tax year, increasing the total amount of contribution room to $41,000 for individuals with no contributions to date. While the increase allows for a substantial opportunity for tax-free investment income and growth, […]

November, 2014 - Upcoming Benefit Changes for Canadian Families

In October the federal government announced four financial initiatives that may impact your family. The first of which is the new “Family Tax Credit”. This tax credit targets Canada’s progressive tax rates whereby two families that have the same household income could pay very different amounts of tax, depending on how their income is comprised. Families with two parents who earn unequal amounts tend to pay more tax than a family with two parents who earn similar amounts.

Families with corporations will not likely benefit from the credit since many already utilize the benefits of income splitting. However, the proposed enhancements for the Universal Child Care Benefit, Child Care Expense Deduction, and the Children’s Fitness Tax Credit will provide added benefit […]

October, 2014 - Life Insurance: Should I Own it Personally or Corporately?

A recurring question that we receive from a number of clients tends to centre around the ownership of life insurance, and whether or not it is best to hold policies personally or corporately.

There are many considerations that need to be made when reviewing the type, amount and duration of life insurance; this is something we can address at another time. Regardless of what type of life insurance you hold, you still need to pay for it. The question is, “Is it best for me to own and pay for the policy corporately or personally?” For simplicity, our examples will address term life insurance.

Personally Held Life Insurance

Life insurance that is held personally is paid for with personal funds. The premiums […]

August, 2014 - Convention & Business Trip Expenses

Convention and Business Trip Expenses

A common concern among our clients is the Canada Revenue Agency (CRA) rules pertaining to expenses related to convention and business related travel. Two things to keep in mind are the general rules CRA has for expenses. The questions they ask are: “Was the expense incurred for the purpose of earning income?” and “Is the expense reasonable?”

A few of the most frequently asked questions regarding convention and business trip expenses are as follows:

Can I combine a vacation with my business trip?

The short answer is yes. The question then becomes, how much of the trip can you deduct?

You can deduct the costs of your own travel, hotels and […]

June, 2014 - Changes to CPP & OAS

Changes to CPP & OAS

 

Canada Pension Plan (CPP) Rules

In January of 2012, the government changed the rules for both taking and contributing to CPP. What follows are a few highlights.

Taking CPP Early

The normal retirement age for CPP purposes is 65; however, the government allows Canadians to take their CPP up to five years early. The catch used to be that they would reduce your payout by 0.5% for every month you took it early. If you took CPP at age 60, they used to reduce your monthly payment by 30% (60 months x 0.5%) throughout your retirement years. In January of 2012, however, they changed the rules and, for those taking CPP early, began phasing in increased reductions from 2013 […]

May, 2014 - Protecting Your Identity

Protecting Your Identity

Recent vulnerabilities such as the Heartbleed bug, which shut down CRA’s website at the height of tax season, or the now-patched bug in Internet Explorer that allowed hackers to secretly take control of a computer, remind us of the need to protect personal information. We want to do everything possible to ensure none of the personal information you entrust to TPC lands in the wrong hands.

Securing Information

Alarm systems protect any hard copy information on file in TPC’s offices; our physical locations are secure. Internally, our computer systems are password protected and secure, with multiple backups in place. The only potential area of concern is email. Unencrypted emails could possibly be read by determined individuals while in transit from […]

April, 2014 - Records Management

Records Management

Tax season is winding down and many of us are now facing piles of paper or electronic documents that we used for filing our taxes. The question now becomes: what records do I have to keep, and can I get rid of any of these piles of paper? We’ve created a quick and dirty guide for record keeping based on CRA’s regulations.

What records should I keep?

Personal: Keep any documents that support your tax return, including tax slips, receipts for expenses and donations, investment statements, bank statements, and pay stubs.

Business: Keep any documents that support your tax return (revenue and expenses), including but not limited to:

Bank statements, cancelled cheques (make sure you save your electronic statements and cancelled cheques to […]

February, 2014 - Tax Changes & Federal Budget

Tax Changes – What’s New in 2014

Some of you may be wondering about the tax and financial changes that have taken place between 2013 and 2014. Although last year’s budget did not propose anything too substantial, there were a number of items that came into effect in January 2014.

Dividend Tax Credit for Non-Eligible Dividends

Beginning this January, the effective tax rate on non-eligible dividends has increased. This year, dividend gross-up has been reduced to 18% and the dividend tax credit to 11%. This results in an increase in the top marginal federal rate on non-eligible dividends from 19.58% to 21.22%. Non-Eligible dividends make up the majority of dividends that individuals receive from their corporations and will likely […]

January, 2014 - Top 10 Financial Habits to Live By

We were asked via our Facebook page if we could suggest a few financial habits to adopt this year, so we thought we’d use it to kick off the year as January’s newsletter topic. Do you have a good habit to add? Do you have a question we can answer in an upcoming newsletter? Please let us know!

1. Make Financial Goals

Start the year by looking at where you’ve been and where you want to go. Goals can be small, like saving up for a holiday or a new car, or they can be big – like saving for a down payment or making an extra payment on your mortgage.

2. Pay Off Credit Cards Monthly

This is a MUST; only spend what […]

December, 2013 - Year-End Deadlines Fast Approaching

With the end of the 2013 calendar year a mere few weeks away, we thought it an opportune time to remind our clients of deadlines which are fast approaching.

Conversion of an RRSP to a RRIF

If you turned 71 in 2013, you must convert your RRSP to a RRIF by December 31 of 2013. Furthermore, if you want to make one last RRSP contribution to your own RRSP, you must do so by December 31, 2013. You don’t get the extra 60 days like you do in all other years.

Charitable Donations

If you wish to claim charitable donations on your 2013 income tax return, you must make the contribution by December 31.

RESP Contributions

You must make RESP contributions by December 31, 2013 if […]

November, 2013 - Estate Planning Tips

Internet Passwords

Although it may not be the first thing that comes to mind when drafting your will, leaving a list of passwords behind is very important. It can make the task of wrapping up your estate easier with less confusion and headaches. Without these passwords, something as simple as closing an account can cause significant problems. By leaving a list of passwords, usernames, PINs etc., along with instructions on how they need to be handled, you are ensuring the necessary steps are taken to mitigate the chance for problems and confusion. Passwords could be needed for digital devices such as computers or phones, email accounts, social networking sites, online banking or financial accounts, online media accounts, and other digital assets. […]

October, 2013 - Importance of Filing Annual Returns

Once you have incorporated your professional practice, your legal obligations do not end. You are required to file an annual return with your provincial corporate registry every single year. The deadline for filing this report varies by province or territory. In Alberta and the Yukon, you must file by the 31st of the month following each anniversary month of incorporation. B.C. and Ontario give you 2 and 6 months respectively after the anniversary date of incorporation. You are not required to file this return in the year of incorporation. The requirement begins after one full year of being incorporated.

This is not to be confused with filing your corporate income tax return. The filing of your annual return is a corporate […]

September, 2013 - Childcare Expenses

Childcare Expenses

There are many expenses that qualify for a tax deduction. Some of the most common ones are daycare and camps.

In order to qualify for a deduction, the expense must be incurred to allow you to go to work. In addition, the CRA only allows it to be deductible against the lower income spouse’s earned income. An exception is made if the lower income person was going to school, had a physical or mental infirmity or confined to a hospital or similar institution. Earned income for the purposes of claiming childcare costs are T4 income, self-employment income or scholarships and bursaries.

Other limitations to consider are:

CRA limits the annual amount you can deduct to $7,000 for children 6 […]

August, 2013 - The Huffington Post

Our monthly newsletters highlight areas of concern and hopefully let you know how we can help. Over at The Huffington Post, Tim Paziuk’s blog covers a broader range of topics from a more personal point of view. Check out a few recent posts below, or click here to go directly to Tim’s blog.

How the Government Sneakily Pockets Your Pension

(27) Comments | Posted July 25, 2013 | 5:00 PM

I read an article the other day that brought up a problem that, sadly, happens more than we think: dying before you collect Canada Pension Plan (CPP) retirement benefits.

Financial Planners May Not Have Your Best Interests in Mind

(3) Comments | Posted May 10, 2013 | 8:03 AM

There is a major battle going on […]

July, 2013 - Automobile Tax Rules

A common concern among our clients is the Canada Revenue Agency (CRA) rules pertaining to automobiles. A few of the most frequently asked questions are as follows:

Should I buy or lease my vehicle?

This is actually a very complex question and entire books have been devoted to the subject. It depends on many variables such as:

How long do you intend to drive this vehicle?

What kind of interest rate is implicit in the lease?

Do you prefer to always drive relatively new vehicles?

What is the buyout option of the lease? When is it?

What is the finance rate you can get if you buy?

How important is pride of ownership to you?

This is just a very partial list. There are many other variables to consider […]

June, 2013 - Bookkeeping

All businesses need bookkeeping. At the very least, recording income and expenses allows a business to determine its profitability. Bookkeeping also prepares a business for completing annual financial statements, which may be required by law. Finally, regular bookkeeping means “the books” can be queried at any time for a current snapshot of how the business is performing.

Bookkeeping can’t be avoided. The question is, do you want to do it yourself or hire someone to do it for you?

Do I need a bookkeeper?

Many business owners believe that by doing the books themselves, they will gain a better understanding of their business. In actuality, it is better to have an experienced bookkeeper keep the books and produce monthly or quarterly reports for […]

May, 2013 - CRA Audits

It’s not the end of the world. If you are an honest person who keeps reasonably good records, you should have little to worry about.

Reasons CRA Audits People

In Canada, we use a self-assessment tax system which means each Canadian is responsible for reporting income and expenses for each taxation year. CRA says they use random samples of taxpayers to ensure the fairness and integrity of our tax system. Realistically speaking, you are more likely to be audited if there is a large change from one year to the next. For example, if you have a large moving expense or your income has increased dramatically, you are more likely to be audited.

What to expect during an audit

The auditor will begin by […]

April, 2013 - Federal Budget 2013 Highlights

The budget did not propose many large scale changes to the Federal Income Tax laws. The federal personal income tax rates remain unchanged, as do the federal general and small business corporate income tax rates.

However, there were some relatively minor changes to the Federal tax laws. The following tax measures introduced by Finance Minister Jim Flaherty on March 21, 2013 may impact our clients. *

Dividend Tax Credit for Non-Eligible Dividends

The budget proposes to increase the effective tax rate on non-eligible dividends (i.e., dividends paid out of corporate earnings subject to a preferential tax rate, such as the small-business rate). Currently, non-eligible dividends are subject to a gross-up of 25% and a dividend tax credit of 13.33%. The budget proposes […]

March, 2013 - Moving Assets Into a Professional Corporation.

If you have been operating your professional practice as a proprietorship for some time, you may have built up significant assets in your unincorporated practice. If you’ve made the decision to incorporate your practice, the question becomes: how can I transfer the assets from my proprietorship (personal asset) into my new professional corporation (PC) in the most tax-efficient manner possible?

Section 85 Rollovers

Normally, when you transfer assets it must be done at fair market value. For example, if you have an investment portfolio which originally cost $100,000 but is now worth $150,000, the portfolio must be transferred in at $150,000 if no tax elections are made. This would require you, the individual, to report a $50,000 capital gain on your personal […]

February, 2013 - How can we help?

If you have a question, why not send it our way? 

We can provide you with an answer or we can provide you with the tools for making your own decisions. Email your questions to info@tpcfinancial.com. We’ll either respond to you directly or feature your question (anonymously) in one of our newsletters or blogs.

Need inspiration? Check out one of the other ways you can interact with Tim Paziuk and the entire TPC team. If something sparks your interest, let us know! We’d love to know what piques your curiosity. Is there something you’re struggling to understand? Send your questions our way and let us help.

Twitter

Follow Tim on Twitter for a sampling of topics currently catching his interest.

Tim Paziuk’s Blog

Visit Tim’s blog for his personal collection of […]

January, 2013 - Associate Agreements

As many dentists discover, associate agreements range anywhere from fair to unfair. Often times, they are written heavily in favour of the employer and can restrict a dentist to unreasonable terms. These agreements, however, are almost always negotiable and can be adjusted to ensure a mutually beneficial contract is made.

Before addressing specific points within the contract, you want to be sure that the basics align with your career and lifestyle aspirations. This may seem obvious, but the promise of good pay or vacation time can be distracting. Ask yourself: Is this job and agreement a step in the right direction?

When forming an associate agreement, consider the following points:

Billings

A typical associate should make anywhere between 30-40% of gross billings, depending on […]

December, 2012 - BC Seniors’ Home Renovation Tax Credit

In the spring of 2012, the BC Government brought in a wonderful new tax credit specifically for BC Seniors. The BC Seniors’ Home Renovation Tax Credit is a refundable personal income tax credit worth 10% of eligible expenditures to assist seniors with the cost of permanent home renovations that improve accessibility or help a senior be more functional or mobile at home.

The maximum credit is $1,000 each year. There is no minimum threshold and there is no lifetime maximum. Because this credit is refundable, you can get up to $1,000 back on your tax return each year even if you pay no taxes. So, the first $10,000 of eligible expenditures you incur each and every tax year qualify for this […]

November, 2012 - Year-End Deadlines Fast Approaching

With the end of the 2012 calendar year a mere few weeks away, we thought it an opportune time to remind our clients of deadlines which are fast approaching.

Conversion of an RRSP to a RRIF

If you turned 71 in 2012, you must convert your RRSP to a RRIF by December 31st of 2012. Furthermore, if you want to make one last RRSP contribution to your own RRSP, you must do so by December 31, 2012. You don’t get the extra 60 days like you do in all other years.

 

Charitable Donations

If you wish to claim charitable donations on your 2012 income tax return, you must make the contribution by December 31.

 

RESP Contributions

You must make RESP contributions by December 31 if you […]

October, 2012 - The Case for Rental Properties

One of the main tenets of investing is diversification. Traditionally, investment advisors define diversification as being in many different asset classes, such as stocks, bonds, preferred shares, etc. These are called paper assets. What they usually won’t mention, however, is another class: real estate, or hard assets. The reason many investment advisors won’t mention real estate as an investment option is because they do not get paid on your real estate holdings. This is unfortunate, as owning real estate is an important component of any investor’s portfolio.

When you rent out your basement suite or buy a property to rent out, you get the following three main benefits:

1. A hard asset which will more than likely appreciate in value over time.

2. […]

September, 2012 - RESPs

RESPs were created to encourage Canadians to save for their children’s post-secondary education. The encouragement comes in the form of the Canada Education Savings Grant (CESG) paid into the plan by the government. With proper planning, the CESG can total $7,200 per child over the lifetime of an RESP.

RESP Basics

RESPs are similar to RRSPs because the investment income earned on your contributions is not taxed until it is withdrawn from the plan. When it’s time to withdraw for university, the money you have contributed is withdrawn tax-free. Money contributed by the government (CESG) and investment income, however, are taxable to the plan’s beneficiary upon withdrawal. Most beneficiaries are students with little other income for the year and will pay little […]

August, 2012 - New Website!

We’re happy to announce the launch of our new website. Please check out our new look at www.tpcfinancial.com.

We’ve been working with Upanup Studios in Victoria, BC for a few months in order to provide you with a more functional and informative site. We’re often asked, “What exactly is it that you do?” As our services are tailored to meet the specific and individual needs of each client, this question can be difficult to answer. Our updated website aims to familiarize new and existing clients with our process, as well as highlight what sets us apart and makes us a leader in professional corporations and financial management.

We work for you and we work with you.

Education is important. Tim and the entire […]

July, 2012 - Elderly Dependents

Do you financially support an elderly parent, grandparent or close relative?
Does your elderly parent, grandparent or close relative qualify for the disability tax credit?
Does your elderly parent or grandparent live with you?

If you answered yes to one or more of these questions, you may be eligible for additional income tax credits on your tax return.

Allowable Medical Expenses for Other Dependents

If you paid for medical expenses for a parent or grandparent, you could be eligible to claim those expenses on your own personal tax return. If you financially support any close family member, you may be eligible to claim their medical expenses on line 331 of your tax return. Simply collect all of their medical receipts, add them up, deduct 3% […]

June, 2012 - eCourier

As technology changes and the use of email becomes more convenient and time efficient for you, our client, we are reminded of the need to protect your information and keep our systems as secure as possible.

After much thought and investigation, we have found a service (e-Courier.ca) that will ensure any personal
information we send to you via attachment, as well as any information you send to us (as long as you use the
program), has been encrypted so that it is virtually impossible to be intercepted by outside parties.
Effective July 1st, this is the only way you will receive attachments containing sensitive information from our office.

The process is meant to be as easy and straightforward as possible, but with any new changes […]

May, 2012 - Protecting Minors

We take good care of our children and, if something were to befall us, we have our wills, powers of attorney, and a benevolent society upon which to rely; however, while no child is overlooked, are they actually seen?

With minor children, complications can arise on second death (in your wills) or on second mental incapacitation (in your powers of attorney). The finances might be available, but has the care of the children and distribution of the finances been fully thought out and addressed?

Things to take into account when addressing your wishes for your children:

Do you want to ensure access and visiting rights for family? Do you want to deny them for certain people?
Do you want your children in certain daycares […]

April, 2012 - Estate Planning 2/2

Death is something no one likes to think about; however, like taxes, death is inevitable. Therefore, like any aspect of your financial life, you should plan for it to ensure your loved ones are well taken care of.

Income Splitting After Your Death

If you are married or have a common law partner and you have significant assets, your wills should include a spousal trust in the event that one of you predeceases the other. This will allow the survivor to continue to income split after the first death. The surviving spouse can be named as the trustee, giving them total control of the assets. Please note, a trust created on death is called a testamentary trust and, as such, is taxed […]

March, 2012 - Estate Planning 1/2

Death is something no one likes to think about; however, like taxes, death is inevitable. Therefore, like any aspect of your financial life, you should plan for it to ensure your loved ones are well taken care of.

The following is summary of the documents you should have in preparation of your death: a Power of Attorney, a Representation Agreement and a Will.

What is a Power of Attorney?

The grant of a General Power of Attorney means that you are giving another person the ability to deal with your affairs while you are not incapacitated. It has the benefit of being relatively inexpensive and, of course, it can be revoked at any time. On the downside, it gives the other person significant […]

January, 2012 - Tax Deadlines

T-Slips

While it’s tempting to file your income tax return early, please be aware that the deadlines for mailing T-slips to recipients vary. To ensure you include all T-slips with your return, please be aware of the following deadlines.

Slip/Form
What It Is
Filing Deadline

T3 Slip
Investment income information slip from trusts (most mutual funds are structured as trusts)
March 30th

T4 Slip
Employment information slip
February 29th

T4A Slip
Self-Employment information slip
February 29th

T5 Slip
Investment income information slip from corporations
February 29th

Filing Deadline

Slip/Form
What It Is
Filing Deadline

T1 Form
Personal income tax return
April 30th June 15th if self-employed(taxes still must be paid by April 30th, T1 filed by June 15th)

T2 Form
Corporate income tax return
Six months after fiscal yearend (taxes must be paid three months after year-end, T2 must be filed six months after year-end)

Helpful Tips

The […]

November, 2011 - Salary Reminder

This note is just a friendly reminder to those clients who own a professional corporation and are drawing primarily dividends for 2011.

Please remember to take a $3,500 salary for 2011 so you can take full advantage of the employment tax credit
amount. Please note that there is no withholding tax requirement for this $3,500 salary.

If you have any questions or concerns, please let us know.

Happy Holidays

October, 2011 - Year End

With the end of the 2011 calendar year a mere few weeks away, we thought it would be an opportune time to remind our clients of some deadlines which are fast approaching. Here are some of the more important ones:

RRSP to RRIF Conversions

If you turn 71 in 2011, you must convert your RRSP to a RRIF by December 31, 2011. Furthermore, if you want to make one last RRSP contribution, you must do so by December 31, 2011; you don’t get the extra 60 days like you do in all other years.

Charitable Donations

If you wish to claim charitable donations on your 2011 income tax return, you must make the contribution by December 31, 2011.

RESPs

You must make RESP contributions by December […]

September, 2011 - Mortgage Protection

Do you need life insurance to cover your mortgage?

Your bank would be happy to sign you up for their mortgage protection plan, but that’s not always the best thing to do.

Flexibility

Eligibility for coverage with group insurance, like the product your bank or financial institution will offer you, is usually a ‘yes’ or ‘no’ decision; you either qualify for the coverage or you don’t. Personal coverage purchased from an individual insurer has more flexibility. If you represent an increased risk to the insurer over the standard population, they may be able to offer you the coverage you may not have qualified for at the bank. They can address the increased risk by assessing an extra premium or by offering the policy […]

August, 2011 - Credit

Many clients ask what influences their ability to obtain lower interest rates and preferential financing offers; many also wonder how applying for financing affects their creditworthiness. In this month’s newsletter, we examine the three most important things lenders want to know about you before extending credit: your credit history, report and score.

Credit History

Every time you take out a loan or use your credit card, your credit history is affected. Whenever an institution extends you credit, your repayment tendencies are recorded by a credit bureau that collects your information, including how long you take to repay debts. When you look to borrow money, institutions contact a credit bureau to access your credit history. If your credit history is poor, lenders may […]

July, 2011 - Tax Shelters

When you invest your hard-earned money, you should make sure you do your due diligence on what you are actually investing in. Most Canadians invest in things such as real estate, stocks, bonds, mutual funds, GICs, T-bills, etc. A select few invest in things like private companies and tax shelters.

When you invest your money, your primary goal should be to make money on your investment. You make money in one of two ways. First, on any income the investment produces such as rent, interest or dividends. Second, you would like to have capital appreciation on that investment, especially over the long term. Another element which is desirable is the degree of control you have over the investment.

Private Companies

Let’s look at […]

June, 2011 - Losses

When you invest your money in any asset for investment purposes, the main goal is to make money from that investment; however, things don’t always turn out as planned. Sometimes, there comes a time when you have to bite the bullet, take the loss and move on. While losses can be painful experiences, there is an opportunity to make the government share the pain by reducing your tax bill; however, not all losses are created equal.

Capital Losses

When you invest in stocks, bonds or mutual funds in a non-registered account and you sell them at a loss, it triggers a capital loss for tax purposes. You can use this capital loss to offset any capital gains you realize in the same […]

May, 2011 - RESPs

RESPs were created to encourage Canadians to save for their children’s post-secondary education. The encouragement comes in the form of the Canada Education Savings Grant (CESG) paid into the plan by the government. With proper planning, the CESG can total $7,200 per child over the lifetime of an RESP.

RESP Basics

RESPs are similar to RRSPs because the investment income earned on your contributions is not taxed until it is withdrawn from the plan. The withdrawals, however, are taxable to the plan’s beneficiary – usually a student who will pay little or no income tax on the withdrawal.

RESPs differ from RRSPs in that your contributions are not tax-deductible.

CESG Basics

The CESG payment equals 20% of your contributions, and it is paid until the […]

March, 2011 - TFSAs

Starting in 2009, the Canadian government introduced a new type of registered account called the Tax-Free Savings Account (TFSA). Every Canadian 18 and over can invest $5,000 per year in this new registered account.

You do not need to have “earned income” to build up room as you do with an RRSP. Amounts contributed to a TFSA grow tax-free; however, unlike an RRSP, the amounts you contribute are not tax-deductible. That is the bad news. The good news is that when you take money out of your TFSA, 100% of what you take out is non-taxable.

One downside to a TFSA is that if you happen to lose money on your investment, there is no ability to “use the loss” to offset […]

February, 2011 - Tax Deadlines

Have you ever had the displeasure of filing your personal income tax early, say in March and then look in the mailbox a week or so later and find you have got more T-Slips? When you sheepishly give these to your accountant, they dutifully file a form called a T1- Adjustment. This generally costs you more money in accounting fees and can draw unwanted attention from the Canada Revenue Agency.

We thought it might be helpful to give you a brief overview of all the T-Slips, what they are for and what their deadline for filing is.

Slip/Form
What it is
Filing Deadline

T1 Form
Personal income tax return
April 30
June 15th if self employed (although taxes due Apr. 30)

T2 Form
Corporate income tax return
Six months after fiscal […]

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