| Glossary of
Financial Terms | | |
| 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? |
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| 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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