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 Tax Articles

401(k) / IRA to RRSP
Investors who have left jobs in the US may want to transfer benefits from their US retirement arrangement 401(k) or Individual Retirement Arrangement (IRA) to their Canadian Registered Retirement Savings Plan (RRSP) on a tax-deferred basis. Under the right conditions, this can simplify retirement planning and reduce or eliminate the need for duplicate tax reporting.


Can your kids afford to inherit the family cottage?
Your cottage has been a source of enjoyment for you and your family for years and one day you'd like it to belong to your children. And, since you bought it, its value has gone higher and higher. But, while it's nice to see your investment increase in value, can your kids afford to inherit the family cottage?


Back to school: Tips to maximize the tuition and education tax credit
Those who are university bound are likely biting the bullet on the cost of expensive tuition and books, but the tax man may come to your rescue this year. How can incomes from summer jobs be leveraged from a tax viewpoint? It's important to know the rules, according to Evelyn Jacks, author of Essential Tax Facts.


CRA ignores tie-breaker rules again
Canadians who move abroad are often uncertain as to whether or not they continue to have to pay tax in Canada . The basic rule is that if they continue to be a “resident” of Canada , they continue to be liable for tax on their worldwide income in Canada . Unfortunately, a recent court decision has again clouded the already difficult determination of residency for those who travel abroad, according to John Mill , a Canadian lawyer practicing in cross-border issues and a faculty member of the Knowledge Bureau.


Tax talk - the CRA 'top ten'
We often get asked the question, "What items are most likely to be audited by the Canada Revenue Agency (CRA)?" Although we would all like to know the answer to that question with certainty, it is one that is notoriously difficult to predict; however, Deloitte & Touche LLP recently compiled a list of items most likely to be questioned on tax returns. This information, obtained from their practitioners across the country, was based upon their collective experience with thousands of personal tax returns.


Documentation to create a trust
When trusts are used in tax and estate planning strategies it is almost exclusively through the use of a written and detailed document.


Hardball wrong game for government auditors
Recently business owners were jarred over their morning coffee by the headline “Tax auditors vow to play hardball.” As part of their contract negotiations, the 6,000 accountants of Professional Institute of the Public Service of Canada (PIPSC) have vowed to adopt “zero tolerance.” From here on in, the union declares, unless their dispute with the Canada Revenue Agency (CRA) is resolved, no more Mr. Nice Guy.


Tax talk - joint tenancy
I have had quite a few calls over the last couple of months on the subject of joint tenancy. Each case involved a client of Mackenzie who was considering transferring sole ownership in an asset into joint tenancy with right of survivorship. In almost every case, this was being contemplated because, among other things, the client wanted to avoid probate fees.


Sins of omission
With tax season now behind us, many of your clients have likely received their notices of assessment from CRA by now. And while you may not have been directly involved in their tax returns, you may be able to help your clients keep track of key tax-related information throughout the year to ensure that nothing is forgotten come next season's return.


How does an RRSP save me tax?
RRSPs offer two substantial tax breaks. To really appreciate this, you should first be aware that Canada has a "progressive" - or escalating - income tax system. That means the government set up a series of income levels with each level taxed at a higher rate than the one below it.


What a difference a day makes
It is said that timing is everything. This can be true in the taxation field as well. At the head of the list of time-sensitive tax related matters is the filing of income tax returns.


Death and taxes
Everyone knows life has two certainties: Death and taxes. Fewer know the two often coincide.


Your tax return is filed - what happens now?
Every year you file your tax return with the Canada Customs and Revenue Agency (CCRA) by April 30 (if you report business income on your return, you and your spouse have until June 15 to file). Have you ever wondered what happens with your return after you've submitted it?


RRSP savings through reduced income tax
For those who receive a tax refund each year, you may not realize that the refund is a result of overpaying taxes on your employment income. By reducing the amount of taxes withheld on your paycheque, you can use this additional income to make contributions to your RRSP which in turn can be used as a tax credit on your income tax return.


"The more you make, the more you pay!"
While most have come to accept this as a fact of life,the statement always seems to induce an emotional response. This is usually followed by a war story of how someone managed to make some great investment returns only to "give half of it to the government.


Compounding your tax refund for a richer future
If you invested $100 on the first business day of each month for 10 years at an eight per cent rate of return compounded monthly, you would accumulate $18,128, including your principal of $12,000.


A dollar is not a dollar
From a tax preparation perspective, we concentrate on the tax slips that clients provide for their return that is to be filed. From a tax planning perspective, I advise clients to consider their current tax situation at the beginning of each year—and it’s never too late to start planning now.


Taxes on Mutual Funds
If you are an individual mutual fund investor and a resident of Canada, federal income tax considerations may influence your choice of funds. Although this is a general summary, and is not intended to constitute advice to any particular investor, here are some tax factors to consider.


Mutual Funds - Year end distributions tax tips
December 31 is an important date for mutual fund investors, as this is the day most mutual funds make their distributions to investors. Here are some frequently asked questions about how mutual funds distributions are taxed and how this impacts your clients and our answers to these questions.
 Estate Articles

Blind Sided by a Support Claim
It happens. Due to changing and volatile family relationships, an estate and its Estate Trustees/Executors can often be blind sided by a claim for support against the estate. Such claims will arise when the person who has died has either died without a Will or has ignored their legal obligations by not including provision in their Will for someone for whom they ought to have provided.


Estate Planning: Being an Executor
Being named as an executor of an estate is a big undertaking requiring a considerable amount of time and knowledge. You have been entrusted to handle the financial affairs of the deceased in their absence and owe it to them to make sure you know what is required of you.


Joint Accounts
The convenience of holding assets jointly has led to the increasing use of joint accounts as a means of transferring wealth between spouses or partners or to successive generations with little or no financial or administrative consequences. However, advisors should exercise caution before recommending that their clients put property into joint ownership.


Estate planning from the Muskoka chair
Canadians love their cottages and chalets. Many have been in the family for several generations. Estate Plans must be set up to keep these much-loved properties in the family for future generations.


A matter of trust
Setting up an "in-trust" account is an excellent way for a parent or grandparent to split investment income with a child or grandchild and therefore increase a family's disposable income. This income-splitting technique has become extremely popular over the last several years as Canadians search for innovative and legitimate ways to reduce their tax bills. In fact, we get more questions on a day-to-day basis on this topic than any other tax-related issue.


Income splitting using testamentary trusts
If you're considering leaving an income-producing inheritance to someone, putting part or all of it in a trust instead of giving it directly to your beneficiary can impact the family tax bill. Sharing the income (income-splitting) between a testamentary trust (established upon your death through your will) and your heir is a good way, when planning your estate, to save tax, especially it your heir is already to a high tax bracket.


The RRIF basics
When the time comes to either cash in or convert an RRSP to a RRIF or Life Annuity, many people will choose the RRIF for the simple reason that they offer many of the features that make RRSPs so appealing.




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Companion Advisor
Taxes and Estates
Tax Articles
How does an RRSP save me tax?

What a difference a day makes

RRSP savings through reduced income tax

The more you make, the more you pay!

Compounding your tax refund for a richer future

A dollar is not a dollar

Taxes on Mutual Funds

Mutual Funds - Year end distributions tax tips
Estate Articles
Multiple wills may reduce probate fees

Blind Sided by a Support Claim

Joint Accounts

Estate planning from the Muskoka chair

A matter of trust

Income splitting using testamentary trusts

The RRIF basics



The Money Management Newsletter:
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Taxes and Estate Planning