RRSP withdrawal

Don’t Make this Costly Mistake! Be Sure to Declare RRSP Withdrawals as Taxable Income

RRSP withdrawals must be part of your tax planning strategy. It is extremely important to understand the implications of Registered Retirement Savings Plan (RRSP) withdrawals on your taxable income in the year you make the withdrawal.
Below is a well written article that highlights the implications of RRSP withdrawals, and provides a good understanding of the tax system. Remember, seeking professional tax advice is always a prudent strategy.

Running afoul of the CRA on RRSP withdrawals can be a costly mistake
By […]

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Pension Income Splitting: Can It Make a Difference?

Tax season is here! If you have eligible pension income, there may be an opportunity to split income with a spouse/common-law partner. But just how much of an impact can this make?  
For tax purposes, up to 50 percent of eligible pension income can be split with a spouse.
Eligible pension income is determined by the recipient’s age and the nature of the income. In general, under age 65, it includes amounts received from a registered pension plan.* Over age 65, it […]

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It can be Taxing to be a Snowbird

With the days growing longer and nights warmer, it may be easy to forget the polar vortex that froze many parts of Canada this winter. For some, the cold prompted an escape to warmer climates down south. If you are a “snowbird” — spending considerable amounts of time in the U.S. — you need to be aware of U.S. income tax implications.
Even if you have no U.S. tax to pay, you may be subject to various U.S. tax filing […]

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Dispelling Myths about RRSPs

Participation rates for the RRSP have been declining over recent years. In fact, some Canadians believe there is “no point” in investing in the RRSP because of the taxes due in retirement. But the RRSP can provide a substantial tax advantage. Let’s look at a couple of the myths:

Myth: There is no point in investing in an RRSP.  You pay all the savings back in taxes when you retire.

While you do pay tax on RRSP withdrawals, don’t forget […]

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Business Owners: Tips for Year End Tax-Planning

Is it too early to think about year end? As a business owner, if you are thinking about tax-planning strategies, not at all. Now is the time to take steps in order to help minimize 2018 corporate taxes and plan ahead for 2019. Here are some helpful tips to review with your professional advisor: 
1. Consider the New Passive Income and Refundable Dividend Rules

For taxation years starting after 2018, certain passive income earned in the company, and associated companies, in […]

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The Positives (and Perils!) of Joint Ownership

(NOTE: not applicable to Québec residents)
Joint ownership of assets has been growing in popularity with spouses, and now more frequently between parents and children. While there may be benefits, be aware of the potential pitfalls prior to transferring assets into joint ownership.
Joint ownership occurs when an asset is owned by more than one person. Generally, there are two forms of joint ownership:

joint tenancy (with the right to survivorship)—an arrangement in which the ownership of the asset passes directly to […]

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Tax Savings: Use Capital Losses to Offset Capital Gains

Plan Ahead Before Year End
Given the extended bull market, some investors may be considering realizing gains to rebalance their portfolios. As capital gains are subject to tax, one of the more common ways to offset this tax is to use available capital losses. Here is a reminder on how losses may be an opportunity from a tax perspective.
In general, when you sell an investment you must calculate the gain or loss, which is the difference between the proceeds from […]

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RRSP or TFSA Contribution, What’s Best?

Is an RRSP or TFSA Contribution Better?
The answer to the question lies in the status of your personal tax situation, and the amount of disposable income you have.
Quite simply, if you have more than $38,000 per year in earned income and are under age 71, then a RRSP contribution still makes sense from a tax deduction point of view. Your strategy in a RRSP should be to make contributions at a tax rate of at least 10% higher than […]

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Snowbirds: Remember the Residency Rules

Spring is the time when most “snowbirds” return to Canada after fleeing the winter weather for warmer places south of the border. It is also tax season once again and, if you spend significant time in the U.S. during the winter months, you should be aware of the potential tax consequences. For snowbirds who escape to the U.S., did you know that you could be considered a U.S. resident for tax purposes?
The U.S. Internal Revenue Service (IRS) uses the […]

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Review your TFSA to Avoid CRA Penalties

Over recent years, the Canada Revenue Agency (CRA) has increased its reviews of the TFSA, targeting holders that it considers to have over-contributed to the account. If an individual has exceeded their TFSA contribution limit for the first time, (s)he is sent a warning letter and/or Form RC243-P, Proposed TFSA Return. This form shows the amount of penalty tax due according to CRA records. If the excess TFSA amount has been removed prior to receiving the letter, no further […]

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