This document discusses various tax planning strategies, including:
1) Simple income tax planning strategies like IRA conversions to Roth IRAs and using Section 529 plans.
2) Estate planning techniques such as irrevocable life insurance trusts (ILITs) and spousal lifetime access trusts (SLATs).
3) Using non-grantor charitable lead trusts to make charitable gifts with pre-tax income.
4) Intentionally defective grantor trusts, also known as IDIOT trusts, which allow for leveraged gifting using notes with low interest rates.
The document provides explanations and examples of how these different strategies can help clients reduce taxes and plan their estates. It is
This document summarizes the key tax consequences of home ownership including:
1) Determining if a home is a principal residence, secondary residence, or non-residence for tax purposes.
2) Calculating taxable gain on the sale of a residence and exclusions for principal residences.
3) Limitations on deducting interest expenses and points paid on loans secured by homes.
4) Deductibility of real property taxes and first-time homebuyer credits.
5) Tax treatment of homes used for both personal and rental use.
This document provides information about Registered Disability Savings Plans (RDSPs) in Canada. RDSPs allow individuals with disabilities and their families to save and receive government grants to help fund for future needs. The government offers matching grants through programs like the Canada Disability Savings Grant of up to 300% of contributions. RDSPs also benefit from tax-deferred growth over many years. Withdrawals can begin at age 60 and are taxed then. RDSPs require long-term saving as government grants received in the past 10 years may need to be repaid upon any withdrawals or closing of the plan. Financial advisors can help determine optimal contribution strategies and ensure proper planning is in place.
This document summarizes key aspects of individual income tax calculations in the United States, including:
1) It outlines the basic formula for calculating individual tax liability, including components like gross income, deductions, exemptions, taxable income, tax rates, credits, and payments.
2) It describes the requirements for determining personal and dependency exemptions, including the definitions of a qualifying child and qualifying relative.
3) It explains the different filing statuses individuals can use, including married filing jointly, head of household, and qualifying widow. Examples are provided to illustrate how to determine the proper filing status.
The document summarizes key changes from the American Taxpayer Relief Act of 2012 and provides 13 financial planning strategies to consider in response. Some of the major tax changes include higher income tax rates for top earners, increased capital gains and dividend taxes, and new Medicare taxes. The strategies suggest reviewing one's portfolio to optimize its tax efficiency, taking advantage of tax-deferred growth options, and considering Roth conversions.
This document provides learning objectives and content about individual income tax computation and tax credits. It covers determining regular and alternative minimum tax liability, computing employment and self-employment taxes, describing types of tax credits including refundable and nonrefundable personal and business credits, and explaining taxpayer filing requirements and penalties. Examples are provided to illustrate concepts like kiddie tax, education credits, and late payment penalties.
This document discusses various tax planning strategies that can be implemented before or after death to minimize estate taxes and income taxes. It covers reducing the value of assets, increasing liabilities, utilizing annual gift and estate tax exemptions, planning for basis step-ups, structuring closely-held business interests, and final year income tax planning techniques. Key ideas include making annual exclusion gifts, using grantor trusts, private annuities, self-cancelling installment notes, and converting traditional IRAs to Roth IRAs.
This document provides an overview and tips for 2017 individual tax planning. It summarizes key tax rates, deductions, credits, and strategies to consider for reducing tax liability for the year. Potential tax reform proposals could change rates and provisions for 2018, so the document recommends planning based on current tax law and taking advantage of opportunities before year-end 2017 to be effective in mitigating taxes. It includes charts outlining various tax rates, limits, phaseouts and considerations for married and unmarried filers.
This document discusses various tax planning strategies, including:
1) Simple income tax planning strategies like IRA conversions to Roth IRAs and using Section 529 plans.
2) Estate planning techniques such as irrevocable life insurance trusts (ILITs) and spousal lifetime access trusts (SLATs).
3) Using non-grantor charitable lead trusts to make charitable gifts with pre-tax income.
4) Intentionally defective grantor trusts, also known as IDIOT trusts, which allow for leveraged gifting using notes with low interest rates.
The document provides explanations and examples of how these different strategies can help clients reduce taxes and plan their estates. It is
This document summarizes the key tax consequences of home ownership including:
1) Determining if a home is a principal residence, secondary residence, or non-residence for tax purposes.
2) Calculating taxable gain on the sale of a residence and exclusions for principal residences.
3) Limitations on deducting interest expenses and points paid on loans secured by homes.
4) Deductibility of real property taxes and first-time homebuyer credits.
5) Tax treatment of homes used for both personal and rental use.
This document provides information about Registered Disability Savings Plans (RDSPs) in Canada. RDSPs allow individuals with disabilities and their families to save and receive government grants to help fund for future needs. The government offers matching grants through programs like the Canada Disability Savings Grant of up to 300% of contributions. RDSPs also benefit from tax-deferred growth over many years. Withdrawals can begin at age 60 and are taxed then. RDSPs require long-term saving as government grants received in the past 10 years may need to be repaid upon any withdrawals or closing of the plan. Financial advisors can help determine optimal contribution strategies and ensure proper planning is in place.
This document summarizes key aspects of individual income tax calculations in the United States, including:
1) It outlines the basic formula for calculating individual tax liability, including components like gross income, deductions, exemptions, taxable income, tax rates, credits, and payments.
2) It describes the requirements for determining personal and dependency exemptions, including the definitions of a qualifying child and qualifying relative.
3) It explains the different filing statuses individuals can use, including married filing jointly, head of household, and qualifying widow. Examples are provided to illustrate how to determine the proper filing status.
The document summarizes key changes from the American Taxpayer Relief Act of 2012 and provides 13 financial planning strategies to consider in response. Some of the major tax changes include higher income tax rates for top earners, increased capital gains and dividend taxes, and new Medicare taxes. The strategies suggest reviewing one's portfolio to optimize its tax efficiency, taking advantage of tax-deferred growth options, and considering Roth conversions.
This document provides learning objectives and content about individual income tax computation and tax credits. It covers determining regular and alternative minimum tax liability, computing employment and self-employment taxes, describing types of tax credits including refundable and nonrefundable personal and business credits, and explaining taxpayer filing requirements and penalties. Examples are provided to illustrate concepts like kiddie tax, education credits, and late payment penalties.
This document discusses various tax planning strategies that can be implemented before or after death to minimize estate taxes and income taxes. It covers reducing the value of assets, increasing liabilities, utilizing annual gift and estate tax exemptions, planning for basis step-ups, structuring closely-held business interests, and final year income tax planning techniques. Key ideas include making annual exclusion gifts, using grantor trusts, private annuities, self-cancelling installment notes, and converting traditional IRAs to Roth IRAs.
This document provides an overview and tips for 2017 individual tax planning. It summarizes key tax rates, deductions, credits, and strategies to consider for reducing tax liability for the year. Potential tax reform proposals could change rates and provisions for 2018, so the document recommends planning based on current tax law and taking advantage of opportunities before year-end 2017 to be effective in mitigating taxes. It includes charts outlining various tax rates, limits, phaseouts and considerations for married and unmarried filers.
Bunching Tax Deductions to Maximize Their BenefitSarah Cuddy
Bunching expenses, particularly charitable gifts, in one year rather than over multiple can provide added tax benefits, especially after the latest tax law changes. And combining that plan with a donor-advised fund can compound the tax savings.
This document discusses retirement plan distribution options and how to invest distributions. It provides three main distribution alternatives: lump-sum distributions, rolling over to an IRA, or leaving the money in the plan. It notes tax and penalty consequences of each option and emphasizes the benefits of rolling over funds to an IRA to avoid taxes and continue tax-deferred growth. It also provides tips on selecting investments and discusses risks and rewards associated with different asset classes.
The document discusses various wealth management and retirement planning strategies, including:
- Saving enough for retirement by maximizing tax-advantaged retirement plans and IRAs
- Using a 529 plan to save for education costs tax-free
- Managing assets and withdrawals during retirement to ensure savings last through longevity
- Transferring wealth to heirs by using trusts, lifetime gifts, and beneficiary designations
- Minimizing taxes through rollovers, the marital deduction, and stretching IRAs over generations
This newsletter from Cedar Point Financial Services provides information on estate planning, retirement strategies, taxes, and disability insurance. The main article discusses the various purposes that wills can serve, such as distributing property after death, nominating guardians for minor children, nominating an executor, specifying how to pay taxes and expenses, and creating trusts. Other sections provide tips for year-end tax planning, summarize myths about group disability insurance, and ask how much should be borrowed for college.
- College costs are rising significantly, with tuition and fees projected to increase by over 5.5% annually on average. This is putting pressure on students and families to take on increasing debt loads to pay for education.
- A 529 plan is a tax-advantaged college savings plan that allows families to save and invest for future college expenses. Contributions to a 529 plan grow tax-free and qualified withdrawals are also federally tax-free.
- Putnam CollegeAdvantage is a 529 plan offered by Putnam Investments. It provides various investment options, tax benefits, and flexibility in managing savings for college. Contributions can be made in lump sums or installments and withdrawals are simple to take for qualified education
This document summarizes a presentation on year-end tax planning topics for individuals and businesses. It provides an overview of strategies such as deferring income and accelerating deductions to reduce tax liability. For individuals, ideas include maximizing itemized deductions, donating appreciated assets, and harvesting losses. For businesses, opportunities discussed include changing accounting methods, bonus depreciation, Section 179 expensing, and qualified business income deductions. The document lists various tax codes and limitations related to these strategies.
The document discusses the gender retirement gap and provides strategies for women to achieve financial success. It notes that women need to save more than men to have equal assets in retirement due to factors like fewer years worked, lower pay, and longer lifespans. The key strategies recommended include spending less than you earn, investing early and often in retirement accounts, understanding risk tolerance, having a financial plan, and using tools to track spending and calculate savings needs. The document provides examples and calculations to illustrate how to determine the appropriate savings rate to meet retirement goals.
The Fiscal Cliff and 10 Moves Every Investor Should Consider Making Now (...B...D.B. Geehan
Originally published Oct 2012 -- White Paper regarding moves every investor should consider making in the run-up to December 31, 2012 and the Fical Cliff.
This document provides a summary of various tax planning strategies that taxpayers should consider before the end of 2011. It discusses opportunities for reducing tax obligations through increasing retirement contributions, making charitable donations from IRAs, taking advantage of business tax credits, and accelerating capital expenditures. It also highlights estate planning strategies and the need to disclose any offshore assets before certain disclosure deadlines. The overall message is that 2011 provides some unique tax benefits that may disappear at the end of the year.
- Gross income includes all income from any source unless specifically excluded by law. It includes cash as well as non-cash items valued at fair market value.
- Some common exclusions from gross income include life insurance proceeds, gifts, inheritances, employer-provided health insurance, and municipal bond interest.
- The tax treatment of other income sources like interest, dividends, alimony, annuities, and scholarships depends on certain rules and calculations explained in the document.
This document provides a summary of a webinar on last minute tax advice presented by H&R Block and hosted by Jenn Fowler. The webinar agenda included opening remarks, an introduction to the master tax advisor Chris Wilson, discussions on last minute tax tips, new tax credits and deductions, commonly overlooked deductions, common errors that can delay refunds, and a Q&A session. Technical assistance was provided by Paul Huffman, and participants were encouraged to submit questions via chat.
This chapter discusses the definition of gross income and various income categories that are included or excluded from gross income calculations for tax purposes. It covers interest, dividends, alimony, prizes, annuities, life insurance, gifts and inheritances. It also discusses exclusions such as employer-provided health insurance, meals and lodging, municipal bond interest, and social security benefits. The chapter contains examples and learning objectives related to calculating taxable portions of various income streams.
Traditionally, this is the time at which we recommend you take stock of tax and finance for you, your family and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position. Some planning points this year reflect the impact of the pandemic.
lease be assured that we are always on hand to advise and keep you up to date with tax and finance measures as they unfold. Throughout this publication, the term spouse includes a registered civil partner. We have used the rates and allowances for 2020/21.
The document summarizes the key points from a year-end tax planning seminar presented by Anthony J. Madonia on November 21, 2013. It discusses various federal and state income tax rates, exemptions, and deductions that may change in 2014, and provides strategies for individuals and businesses to accelerate deductions and postpone income into the next tax year.
The document provides an overview of helpful tax tips and savings opportunities for the 2016 tax season, presented by Monica Silwanowicz. It discusses limitations on itemized deductions, personal exemptions, and the alternative minimum tax. It also covers opportunities like donating appreciated assets to charity, qualified charitable distributions from IRAs, and potential impacts of tax reform proposals on businesses, individuals, itemized deductions, and estate taxes. The document aims to help taxpayers maximize deductions and plan effectively for the upcoming tax year.
This document summarizes key topics related to itemized deductions and other tax incentives in the US tax code. It covers medical expenses, taxes, interest, charitable contributions, and education incentives like health savings accounts. For each topic, it provides an overview of deductible and non-deductible items, examples to illustrate concepts, and limitations or phase-outs that may apply based on income.
This document provides an overview of retirement plan rollover options for those changing jobs or retiring. It discusses leaving money in a former employer's plan, rolling over to a new employer's plan, rolling over to an IRA, or taking a cash distribution. It notes potential tax implications and advantages of each option, such as continuing tax-deferred growth or avoiding penalties. It also provides tips for evaluating options like consolidating accounts, using special situations strategies, reviewing investments and goals, and seeking expert advice.
Karen Sands discusses key challenges to retirement income and estate planning, focusing on income splitting and minimizing taxes. Income splitting can be done through investing in assets that generate capital gains for children or prescribing loans between family members. Tax can be deferred through RRSPs or paid at lower rates through capital gains, eligible dividends, or pension income splitting. Planning like setting up trusts can reduce taxes paid by heirs. Proper planning through income splitting and upon death can substantially reduce taxes paid over a lifetime and for heirs.
Canadian Tax Insights: How High Net Worth Investors Should Navigate Today’s T...Nicola Wealth
In this webinar, Nicola Wealth CEO, John Nicola will address timely taxation topics to help you understand the developments in Canadian tax policy in relation to the taxation of homes, wealth, capital gains, and marginal tax rates. John will further prepare you to navigate the current tax environment by reviewing several tax planning options available to you and how these strategies integrate with overall portfolio design.
Bunching Tax Deductions to Maximize Their BenefitSarah Cuddy
Bunching expenses, particularly charitable gifts, in one year rather than over multiple can provide added tax benefits, especially after the latest tax law changes. And combining that plan with a donor-advised fund can compound the tax savings.
This document discusses retirement plan distribution options and how to invest distributions. It provides three main distribution alternatives: lump-sum distributions, rolling over to an IRA, or leaving the money in the plan. It notes tax and penalty consequences of each option and emphasizes the benefits of rolling over funds to an IRA to avoid taxes and continue tax-deferred growth. It also provides tips on selecting investments and discusses risks and rewards associated with different asset classes.
The document discusses various wealth management and retirement planning strategies, including:
- Saving enough for retirement by maximizing tax-advantaged retirement plans and IRAs
- Using a 529 plan to save for education costs tax-free
- Managing assets and withdrawals during retirement to ensure savings last through longevity
- Transferring wealth to heirs by using trusts, lifetime gifts, and beneficiary designations
- Minimizing taxes through rollovers, the marital deduction, and stretching IRAs over generations
This newsletter from Cedar Point Financial Services provides information on estate planning, retirement strategies, taxes, and disability insurance. The main article discusses the various purposes that wills can serve, such as distributing property after death, nominating guardians for minor children, nominating an executor, specifying how to pay taxes and expenses, and creating trusts. Other sections provide tips for year-end tax planning, summarize myths about group disability insurance, and ask how much should be borrowed for college.
- College costs are rising significantly, with tuition and fees projected to increase by over 5.5% annually on average. This is putting pressure on students and families to take on increasing debt loads to pay for education.
- A 529 plan is a tax-advantaged college savings plan that allows families to save and invest for future college expenses. Contributions to a 529 plan grow tax-free and qualified withdrawals are also federally tax-free.
- Putnam CollegeAdvantage is a 529 plan offered by Putnam Investments. It provides various investment options, tax benefits, and flexibility in managing savings for college. Contributions can be made in lump sums or installments and withdrawals are simple to take for qualified education
This document summarizes a presentation on year-end tax planning topics for individuals and businesses. It provides an overview of strategies such as deferring income and accelerating deductions to reduce tax liability. For individuals, ideas include maximizing itemized deductions, donating appreciated assets, and harvesting losses. For businesses, opportunities discussed include changing accounting methods, bonus depreciation, Section 179 expensing, and qualified business income deductions. The document lists various tax codes and limitations related to these strategies.
The document discusses the gender retirement gap and provides strategies for women to achieve financial success. It notes that women need to save more than men to have equal assets in retirement due to factors like fewer years worked, lower pay, and longer lifespans. The key strategies recommended include spending less than you earn, investing early and often in retirement accounts, understanding risk tolerance, having a financial plan, and using tools to track spending and calculate savings needs. The document provides examples and calculations to illustrate how to determine the appropriate savings rate to meet retirement goals.
The Fiscal Cliff and 10 Moves Every Investor Should Consider Making Now (...B...D.B. Geehan
Originally published Oct 2012 -- White Paper regarding moves every investor should consider making in the run-up to December 31, 2012 and the Fical Cliff.
This document provides a summary of various tax planning strategies that taxpayers should consider before the end of 2011. It discusses opportunities for reducing tax obligations through increasing retirement contributions, making charitable donations from IRAs, taking advantage of business tax credits, and accelerating capital expenditures. It also highlights estate planning strategies and the need to disclose any offshore assets before certain disclosure deadlines. The overall message is that 2011 provides some unique tax benefits that may disappear at the end of the year.
- Gross income includes all income from any source unless specifically excluded by law. It includes cash as well as non-cash items valued at fair market value.
- Some common exclusions from gross income include life insurance proceeds, gifts, inheritances, employer-provided health insurance, and municipal bond interest.
- The tax treatment of other income sources like interest, dividends, alimony, annuities, and scholarships depends on certain rules and calculations explained in the document.
This document provides a summary of a webinar on last minute tax advice presented by H&R Block and hosted by Jenn Fowler. The webinar agenda included opening remarks, an introduction to the master tax advisor Chris Wilson, discussions on last minute tax tips, new tax credits and deductions, commonly overlooked deductions, common errors that can delay refunds, and a Q&A session. Technical assistance was provided by Paul Huffman, and participants were encouraged to submit questions via chat.
This chapter discusses the definition of gross income and various income categories that are included or excluded from gross income calculations for tax purposes. It covers interest, dividends, alimony, prizes, annuities, life insurance, gifts and inheritances. It also discusses exclusions such as employer-provided health insurance, meals and lodging, municipal bond interest, and social security benefits. The chapter contains examples and learning objectives related to calculating taxable portions of various income streams.
Traditionally, this is the time at which we recommend you take stock of tax and finance for you, your family and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position. Some planning points this year reflect the impact of the pandemic.
lease be assured that we are always on hand to advise and keep you up to date with tax and finance measures as they unfold. Throughout this publication, the term spouse includes a registered civil partner. We have used the rates and allowances for 2020/21.
The document summarizes the key points from a year-end tax planning seminar presented by Anthony J. Madonia on November 21, 2013. It discusses various federal and state income tax rates, exemptions, and deductions that may change in 2014, and provides strategies for individuals and businesses to accelerate deductions and postpone income into the next tax year.
The document provides an overview of helpful tax tips and savings opportunities for the 2016 tax season, presented by Monica Silwanowicz. It discusses limitations on itemized deductions, personal exemptions, and the alternative minimum tax. It also covers opportunities like donating appreciated assets to charity, qualified charitable distributions from IRAs, and potential impacts of tax reform proposals on businesses, individuals, itemized deductions, and estate taxes. The document aims to help taxpayers maximize deductions and plan effectively for the upcoming tax year.
This document summarizes key topics related to itemized deductions and other tax incentives in the US tax code. It covers medical expenses, taxes, interest, charitable contributions, and education incentives like health savings accounts. For each topic, it provides an overview of deductible and non-deductible items, examples to illustrate concepts, and limitations or phase-outs that may apply based on income.
This document provides an overview of retirement plan rollover options for those changing jobs or retiring. It discusses leaving money in a former employer's plan, rolling over to a new employer's plan, rolling over to an IRA, or taking a cash distribution. It notes potential tax implications and advantages of each option, such as continuing tax-deferred growth or avoiding penalties. It also provides tips for evaluating options like consolidating accounts, using special situations strategies, reviewing investments and goals, and seeking expert advice.
Karen Sands discusses key challenges to retirement income and estate planning, focusing on income splitting and minimizing taxes. Income splitting can be done through investing in assets that generate capital gains for children or prescribing loans between family members. Tax can be deferred through RRSPs or paid at lower rates through capital gains, eligible dividends, or pension income splitting. Planning like setting up trusts can reduce taxes paid by heirs. Proper planning through income splitting and upon death can substantially reduce taxes paid over a lifetime and for heirs.
Canadian Tax Insights: How High Net Worth Investors Should Navigate Today’s T...Nicola Wealth
In this webinar, Nicola Wealth CEO, John Nicola will address timely taxation topics to help you understand the developments in Canadian tax policy in relation to the taxation of homes, wealth, capital gains, and marginal tax rates. John will further prepare you to navigate the current tax environment by reviewing several tax planning options available to you and how these strategies integrate with overall portfolio design.
Dokumen tersebut merupakan ringkasan profil dan kegiatan Sanggar Anak Saraswati yang berlokasi di Kweni, Bantul, DIY. Sanggar ini didirikan pada 2010 dengan tujuan menumbuhkembangkan bakat anak, dan telah mengikuti berbagai kegiatan seperti pentas seni dan festival.
It all started from a simple question: “How come brands don’t do more artistic collaborations?”
This compilation was developed to bridge between art and the commercial storytelling that brands, creative and media agencies, so often find themselves needing to tell, and as a creative/idea thought starter.
Read on to see how the diverse, significant creative talents both inside and especially outside of the traditional creative/media agency ecosystem can benefit your brands.
Genzilla - Who are Gen Z? And why do we need to know about them? (Vietnam Rep...Phuc Nguyen Huu
They're the decision makers of tomorrow. They’re the opinion leaders of today. Born in the digital era, Gen Z is fearless when it comes to experiencing new things; they have access to almost any information they might be interested in. So make sure your brands appear in the right way at the right place for them. It's critical to know their potential consumers of tomorrow's market, what drives them and how to communicate with them.
Download your free report to learn more about GenZ in Vietnam.
This document appears to contain contact information for an individual named Kristina Rylova, including a name, date, and what appears to be a generated PDF footer. In 3 sentences or less, this document contains limited identifying information for an individual.
Kak, aku ada tugas proposal nih..
Proposal apasih?
Gimana sih cara buat proposal?
Apa aja yang harus dicantumin diproposal?
-------------------------------------------------
PPT kali ini, tentang contoh proposal bertema seni budaya.
PPT ini dibuat karena adanya tugas kelompok.
Semoga bermanfaat~
There are a number of ways you can reduce your 2015 tax bill. From mitigating the effect of the Net Investment Income Tax to ideas for retirement and estate planning, CBIZ MHM has outlined several tips you can use for your year end planning in our 2015 Individual Tax Planning Supplement. We encourage you to carefully consider how the strategies discussed in the supplement will benefit you and your family. You can also contact your local CBIZ MHM professional for more information.
Prepare your 2017 tax filing and create efficiencies in your tax strategies for 2018. The CTS Financial Group Tax-Time Planning guide offers you tips for your 2017 return and ideas to help you stay on track this year.
This document provides information about making qualified charitable distributions from Traditional IRAs or rollover IRAs without having to pay federal income taxes. It outlines who qualifies to make these distributions, where the contributions can be directed, how to implement the strategy, how it can be used to meet required minimum distributions, and other details about the tax implications. The key points are that eligible individuals age 70 1/2 or older can distribute up to $100,000 annually to qualified charities from their IRAs without tax consequences, the distribution must be paid directly to the charity, and individuals should consult their tax advisors before utilizing this strategy.
The document provides an overview of Tax-Free Savings Accounts (TFSAs) in Canada, including basic features, eligibility, contribution limits, withdrawals, transfers, and strategies for using TFSAs. Key points are that TFSAs allow tax-free growth of investment income and withdrawals, contributions are not tax deductible, and unused contribution room can be carried forward to future years. The document also compares TFSAs to non-registered and RRSP accounts, and notes services an advisor can provide regarding TFSAs.
John Smith, a financial advisor, provides information about converting traditional IRAs to Roth IRAs. Key points include: everyone is now eligible to convert regardless of income; converted amounts can be reported over two years to reduce taxes; Roth IRAs offer tax-free growth and withdrawals in retirement. An example shows how converting $60,000 for a 28% taxpayer could provide tax-free growth over decades. Strategies discussed include converting small amounts over multiple years or using recharacterization if taxes are too high.
This document provides a summary of contribution limits for various retirement accounts in 2018, including Traditional and Roth IRAs, SEPs, SIMPLEs, Individual(k)s, HSAs, and Coverdell ESAs. The main points covered are:
- Traditional and Roth IRA contribution limits are $5,500 each ($6,500 if over age 50) and phase out at higher income levels
- SEP, SIMPLE, and Individual(k) plans allow for higher contribution limits up to $55,000 but have additional eligibility requirements
- HSAs allow contributions up to $3,450 individual/$6,900 family and grow tax-free if used for medical expenses
- Coverdell
This document discusses the tax planning strategy of income splitting through non-arm's length interest-free loans between family members. It notes that until March 31, 2012, attribution rules do not apply to loans made at the prescribed interest rate of 1%. Making a loan at the 1% rate allows high-income family members to transfer investment income to be taxed in the hands of lower-income family members, resulting in overall tax savings for the family. Several examples are provided to illustrate how the strategy can significantly reduce taxes over time through compounding returns on the income transferred.
Ira Optimized Skills 101 Pp Tam Inc Rev Slide ShareTara A
The document discusses different types of individual retirement accounts (IRAs) including traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, and Coverdell Education Savings Accounts. It provides information on contribution limits, tax treatment, eligibility, and key features of each type of IRA. The document is intended to help explain the different IRA options available for retirement savings.
The right tax strategy stays current with your environment.
The political landscape isn’t the only thing changing in
2016. Estate planning opportunities are also shifting. This
supplement incorporates estate planning updates and other
considerations into tips designed to decrease your 2016 tax
bill. Charts throughout the supplement, including tax rates,
qualified retirement plan limitations and FICA/Medicare
taxes further help with your tax planning.
The document provides information about preparing for a comfortable retirement through participation in an employer-sponsored 401(k) plan. It discusses how the plan works, including eligibility, contribution types and limits, vesting schedules, and taking withdrawals. It emphasizes the importance of starting contributions as early as possible to benefit from compound growth over time. Sample asset allocation models are presented to illustrate how diversifying investments based on risk tolerance and target retirement date can help achieve retirement goals.
This document discusses various charitable giving techniques and their tax implications. It begins by defining a charitable gift as a donation to a qualified charitable organization for the primary purpose of benefiting the charity. It then discusses different types of charitable gifts one can make during their lifetime or after death through their will or trust. These include outright gifts of cash or property as well as more complex planned giving vehicles like charitable lead trusts, remainder trusts, and gift annuities. The document provides details on deductibility limits, substantiation requirements, and how different techniques can help achieve donor goals like reducing taxes or receiving lifetime income from donated assets.
The document provides an overview of different ways to structure charitable gifts through trusts and other planned giving vehicles. It discusses outright gifts, retirement plan gifts, and bequests as simpler options, as well as split-interest gifts like charitable remainder trusts, charitable lead trusts, pooled income funds, and charitable gift annuities that provide tax benefits to donors while also benefiting charities. It compares the structures, tax treatment, advantages and disadvantages of these different planned giving techniques.
This chapter discusses gross income and exclusions. It defines gross income for tax purposes and explains when taxpayers recognize income. It discusses the various sources of income, including income from services, property, annuities, and other sources. It also covers the major exclusion provisions that allow taxpayers to exclude or defer certain types of income from gross income, such as municipal bond interest, home sale gains up to $250,000, education-related exclusions, and foreign earned income up to $97,600.
This document provides a summary of key estate planning considerations and taxation rules that apply on death. It discusses the deemed disposition of assets and taxation of capital gains, exceptions for transfers to spouses and dependent children, principal residence and vacation property rules, issues related to US and business properties, charitable gifts, probate fees, and trusts. Readers are advised to seek professional advice when planning their estate to navigate complex tax implications and avoid unintended consequences.
Pragmatic Steps to Managing Money Early in Your CareerPeggy Groppo
GW & Wade provides comprehensive financial services including retirement planning, investment management, tax planning, estate planning, and more. Their expert counselors create custom plans for each client based on their unique needs and goals. Services include income tax planning, cash flow analysis, charitable gifting strategies, education planning, and executive team services. Counselors help clients manage their investments and assets to stay on track with their financial plans over time.
The document discusses the Investors Group Charitable Giving Program which allows donors to establish a personal charitable giving account. Key benefits include having no administrative responsibilities, immediate tax benefits, and the ability to support charities over time. The process to set up an account is simple, taking only 5 steps: naming the account and successors, making an initial donation, selecting investment funds, recommending annual grants, and making further contributions. The program provides a smart way for donors to support charity through both current and deferred gifts.
Jeffrey A. Forrest, Your Safe Money for Life Coach and Co-Founder of The Core Financial Group, spotlights six ASTUTE strategies in order to maximize returns for the upcoming tax season.
2. This presentation
Written and published by Investors Group as a general source of information
only. It is not intended as a solicitation to buy or sell specific investments,
nor is it intended to provide tax, legal or investment advice. Readers should
seek advice on their specific circumstances from an Investors Group
Consultant.
The Canada Education Savings Grant and Canada Learning Bond (CLB) are
provided by the Government of Canada. CLB eligibility depends on family
income levels. Some provinces make education savings grants available to
their residents.
Although we have tried to ensure the accuracy of this information, tax laws
change frequently so the provisions and exemptions mentioned in this
presentation may change.
Investment products and services are offered through Investors Group
Financial Services Inc. (in Québec, a Financial Services firm) and Investors
Group Securities Inc. (in Québec, a firm in Financial Planning). Investors
Group Securities Inc. is a member of the Canadian Investor Protection Fund.
™ Trademarks owned by IGM Financial Inc. and licensed to its subsidiary
corporations.
2
3. The importance of tax planning
Top marginal tax rates for 2012
Alberta 39.0%
British Columbia 43.7
Manitoba 46.4
New Brunswick 43.3
Newfoundland and Labrador 42.3
Northwest Territories 43.1
Nova Scotia 50.0
Nunavut 40.5
Ontario 48.0
PEI 47.4
Quebec 48.2
Saskatchewan 44.0
Yukon 42.4
3
4. The importance of tax planning
Individuals are taxed on a calendar year basis
Good tax planning is a year-round activity
Human nature = procrastination
Year-end provides motivation
4
5. Capital gains and losses
Consider selling investments with accrued capital
losses before year-end if you have capital gains
Net capital losses can be carried back 3 years or
carried forward indefinitely to offset past or future
capital gains
Capital gain/loss inclusion rate has been 50% since
2001
5
6. Superficial losses
30 days before Disposition 30 days after
A superficial loss is deemed to be nil and will not
be deductible
Amount of superficial loss is added to the ACB of
the substituted property
There is no “superficial gain” rule
6
7. Registered Retirement Savings Plan (RRSP)
contributions
Deadline for 2012 RRSP contribution is
March 1, 2013
Generally two cases where it can be advantageous
from a tax perspective to make RRSP contribution
by December 31:
Contributing to a spousal RSP
Contributor turns 71 years of age in 2012
Consider deferring the deduction of RRSP
contribution to a future year when the individual is
in a higher tax bracket
7
8. Spousal RRSP contributions
Valuable planning tool despite pension income
splitting rules
Attribution rules can make withdrawals taxable in
the hands of the contributor
Must be no contributions to a spousal RRSP in the
year of withdrawal or previous two years to avoid
attribution rules
Tip
Contributing to a spousal RRSP before the end of the current year rather
than waiting until the first 60 days of the following year cuts the three
year attribution period by one year.
8
9. RRSP Contributions in the year you turn 71
RRSP must be wound-up by December 31st of the
year an individual turns 71 years of age
Spousal RRSP contributions can be made after 71 if
the contributor spouse has RRSP room and the
annuitant spouse is 71 or younger
No contributions to an RRSP are allowed beyond
this date
Tips
If you have unused RRSP contribution room for 2012, contribute
before the end of the year
If you are receiving earned income in 2012, contribute for 2013
by December 31st of 2012
9
10. Registered Retirement Savings Plans
Tax Tips for the Home Buyers’ Plan (HBP)
Individuals contemplating a withdrawal under HBP may wish to
delay participation until after December 31, 2012 to obtain the
following advantages:
- Extended time period for purchasing a new home
- Extended time period for first repayment by an additional year
- Allows an increased period in which multiple withdrawals can
be made
If HBP withdrawal are made in 2012, ensure all
withdrawals are made by December 31st 2012.
10
11. Registered Education Savings Plan (RESP)
Maximize the Canada Education Savings Grant
(CESG) for all eligible children by December 31
If your child turns 15 this year, be sure that by
December 31 of this year, an RESP for the child has
received either:
At least $2,000, or
At least $100 in any 4 calendar years.
Otherwise, the child is ineligible for the CESG in the years he or she
turns 16 and 17.
If your child turns 17 or younger this year,
contribute what you need to collect your full CESG
entitlement for the year
11
12. Tax-Free Savings Account (TFSA)
Tax tips for a TFSA
If planning on using current non-registered investments to
contribute to a TFSA - trigger capital losses before the end of
the year
- Wait at least 30 days prior to repurchasing the asset
Make withdrawals before end of year instead of early next year
12
13. Tax-Free Savings Account (TFSA)
Common Issues
Transfers of existing TFSAs
- Transfer assets directly from existing TFSA to another TFSA
– Do not withdraw from one TFSA and then re-contribute to
another in the same year
– If a direct transfer is not done, an over-contribution will be
created
Death of the account holder
- Spouse-named beneficiary
– Direct transfer to surviving spouse’s TFSA or
– Contribution of TFSA proceeds at death to surviving spouse’s
TFSA
– Must be made by December 31st of the year following death
- Form RC240 must be filed in either situation
13
14. Pay tax-advantaged amounts by year-end
Individuals are taxed on a calendar year basis
Amounts eligible for tax deductions or credits can
generally only be claimed if paid in the year
Ensure any amount eligible for tax-advantaged
treatment is paid by December 31st
14
15. Items claimed in the year they are paid
Tax deductions
Alimony and maintenance
Child care expenses
Interest, investment counsel and other investment expenses
Safety deposit box rental fees
Moving expenses
Tradesperson tool expense
Tax credits
Charitable donations
Medical expenses
Political contributions
Tuition fees
Pension Income Credit
Children’s Fitness & Arts tax credits
15
16. Items claimed in the year they are paid
Charitable donations Tips
Amount Federal Provincial Consider combining
Tax Tax charitable donations made
Credit Credit* by each spouse
first $200 15% lowest Consider combining
tax rate donations into one year
over $200 29% highest Carry-forward any unused
tax rate charitable donations for up
* Except in Alberta to five years
Instead of donating cash,
consider “gifts in kind”
16
17. Tax Credits
Charitable donations – “Gifts in kind”
Since May 1, 2006 capital gain inclusion rate is 0% for gifts of
qualifying securities
Qualifying securities include:
- Publically traded securities, and
- mutual funds
Tip
Due to reduced capital gains inclusion rate, consider “Gifts in
kind” donations rather than cash donations
17
18. Tax Credits
Political donations Contributions to federal political
Federal parties and to candidates in
Tax Credit federal election campaigns qualify
Amount
Contributions to federal leadership
First $400 75%
campaign are not eligible
Next $350 50% Many provinces also have credits
Next $525 33.33% for contributions to provincial
parties and candidates
Over $1,275 0%
Tip
* Maximum federal credit = $650
Do not donate more than
$400 per year per person
18
19. Items claimed in the year they are paid
Medical expenses
Federal credit is based on qualifying medical expenses in excess
of the lesser of:
- $2,109
- 3% of net income
A common misconception is that medical expenses must be
claimed on a calendar year basis
Tips
Claim the medical expenses for the most advantageous 12 month
period ending in the tax year
Claim medical expenses on the appropriate tax return
Ensure all eligible expenses are claimed
Plan medical expenses to maximize claim
Health insurance premiums qualify as medical expenses
19
20. Tax credits
Pension Income Tax Credit – Tips
Individuals between the age of 65 and 71 should consider
transferring a portion of RRSP to a RRIF or purchasing a non-
registered annuity
Pension income splitting legislation may allow a spouse to
qualify for this credit where they previously would not have
Higher income seniors should take into account how this may
affect their Old Age Security payments and potential clawbacks
20
21. Tax credits
Children’s fitness tax credit & Children’s arts tax
credit
Tip
Consider paying fees for next year before year-end
21
22. Year-end tax planning for business owners
Businesses can be operated in various legal structures:
- Proprietorship
- Partnership
- Trust
- Corporation
Incorporated business can have any 12 month
year-end it chooses
Unincorporated business must calculate income on a
calendar year basis
22
23. Year-end tax planning for business owners
Pay salaries to family members
Salary can be paid to spouse or children
Great income splitting technique
Salary taxed in their hands, possibly at lower marginal tax rates
Must be reasonable
Salary is earned income for RRSP purposes
Allows spouse to contribute to the Canada Pension Plan (CPP)
23
24. Year-end tax planning for business owners
Purchase capital assets before year-end
Capital assets can be depreciated for tax purposes at
various rates
Capital cost allowance (CCA) is limited to ½ of
normal rate in year asset is purchased
Date of acquisition does not affect the CCA claim in
the year of purchase
Tip
If planning to acquire a capital asset in near future, consider
doing so before year-end
24
25. Year-end tax planning for business owners
Tax-free gifts for employees
Gifts can be for special occasions or employment achievements
Cost is tax deductible for employer
Total cost of gifts cannot exceed $500 per year
Tip
Consider paying employee gifts and awards totaling less than
$500 as non-cash gifts
25
26. Canada Pension Plan changes for 2012
In 2011
Premium for postponed retirement
- Old Rule: 0.5% for each month that retirement is postponed
after age 65 to a maximum of 30%
- New Rule: % will be increased to 0.7% by 2013
– Increased rate phased in over a 3 years period (0.5663%
for 2011 and 0.6326% for 2012)
– Maximum premium will be 42% by 2013
Effective 2012, individuals who are 60 years of age can apply
for CPP even if working but will be required to contribute to
CPP until age 65
Remember, someone taking early CPP may want to apply in
2012 when the reduction is 0.52% vs up to 0.6% in the future.
26
27. Partnership Returns T5013
Current Rule
No T5013 filing needed if less than 6 partners
On January 1, 2011, new filing criteria will come into effect,
and will apply to partnerships with fiscal periods ending on or
after January 1, 2011.
New Rule
If, at the end of the fiscal period, the partnership has an
“absolute” value of revenues and expenses of more than $2
million, or has more than $5 million in assets
or
If, at any time during the fiscal period, the partnership:
- Is a tiered partnership (it is a partner in another partnership or it
has another partnership as a partner)
- Has a corporation or a trust as a partner
- Invested in flow-through shares of a Canadian resource business,
or
- Is requested to file by the Minister in writing
27
Editor's Notes
Please insert your name, title from your business card and the name of the dealer on the slide. The dealer is either “Investors Group Financial Services Inc.” or “Investors Group Financial Services Inc. (a financial services firm in Quebec)” This presentation will review various strategies and tax tips that could be implemented prior to the end of the year in order to minimize income taxes. We will discuss various tax tips of interest to individuals including the selling of investments with accrued losses to offset capital gains realized in the year or the previous three years, contributions to an RRSP if you are turning 71 years of age in the year, and paying certain expenses before year end to maximize tax deductions and credits. The session will also explore tax tips for business owners such as purchasing depreciable assets late in the year, paying salaries to family members, and non-cash gifts to employees. Note that this presentation contains some time sensitive information and should be used only until December 31, 2012.
This slide is intended to show the importance of tax planning. Ensuring an individual claims all of their available tax deductions and credits can save significant amounts of tax. Tax rates above are the top combined federal and provincial marginal tax rates for 2012 for individuals for income other than dividends and capital gains. This is the percentage of tax you pay on your next dollar of income once you are in the top tax bracket. The top tax bracket in all jurisdictions starts at $132,406 of taxable income for 2012 . For individuals in the top tax bracket, for every dollar of tax deduction claimed, tax is saved at the rate outlined above. An example can be given of the tax savings provided by an extra $1,000 of RRSP contribution for your province.
Individuals are taxed on a calendar year basis, so December 31 , 2012 is the last day for most transactions that affect your 2012 income taxes. Consultants like to remind clients that good tax planning is a year-round activity. Human nature being what it is, some special motivation is often needed. For many, the end of the calendar year has important tax consequences that provide extra motivation to focus on tax planning.
If you have realized capital gains in the year, consider selling securities with accrued capital losses before the end of the year if you have capital gains that you can apply it against. Capital losses can generally only be deducted against capital gains. A net capital loss occurs when allowable capital losses exceed taxable capital gains in a year. This amount can be carried back three years or forward indefinitely to offset past or future taxable capital gains. If a net capital loss is realized in 2012 or future years, the loss could be carried-forward to be applied against capital gains realized in subsequent years. Since the capital gains inclusion rate is currently 50 per cent, the losses would offset future gains at this same 50 per cent inclusion rate. However, if capital gains were realized in 2009, a capital loss realized in 2012 should be carried-back to that year to offset the gains which would no longer be available after this year given the three year carry-back rule. As explained on slide # 18, no tax applies on any capital gains realized where an ‘in kind’ charitable donation of publicly-traded shares, bonds, or mutual funds is made.
Beware of the superficial loss rules if planning to repurchase the assets sold at a loss. A superficial loss is defined as a capital loss arising on a taxpayer's disposition of capital property where the same or identical property is acquired by the taxpayer, his or her spouse, or a corporation controlled directly or indirectly by the taxpayer, during a period commencing 30 days prior to or ending 30 days after the disposition of the property. The Income Tax Act prevents double taxation by adding the amount of the superficial loss to the adjusted cost base of the substituted property, thereby placing the taxpayer in the same tax position in regard to the substituted property as was the case prior to the transactions. No tax advantage gained, but no tax disadvantage either. When considering the sale of mutual fund units to realize a loss, the client must ensure that units of the same fund were not purchased in the 30 days prior to the proposed redemption and must make sure that they did not own units of the same fund 30 days following the disposition. Different series of the same mutual fund are considered identical properties. Trust units and shares of corporate class of the same fund are not considered identical properties. Note that a loss realized on the transfer of property to a registered plan (i.e. RRSP, RRIF, RDSP or TFSA) is deemed to be zero and is not a superficial loss. This means that the loss cannot be added to the ACB of a substituted property. If a client disposes of property at a gain, then the capital gain is realized and must be reported, even if the client reacquires the property within a short time period.
RRSP contribution limit for 2012 is 18% of the previous year’s earned income (to a maximum of $22,970 ), minus the value of any benefits accrued in the previous year if you were a member of a pension plan or deferred profit sharing plan (reported as a pension adjustment or PA). This is added to any unused RRSP contribution room from prior years to determine maximum deductible contribution amount for 2012 . Unused RRSP contribution room can be carried forward indefinitely RRSP contributions must be made on or before 60 days following the year ( March 1, 2013 for 2012 ) to be deductible for the year. Since RRSP contributions don’t have to be deducted in the year of the contribution, some individuals may want to consider deferring the deduction to a future year in which the individual is in a higher tax bracket. It’s important to look at the value of a bigger tax saving vs. the opportunity cost of delaying the tax deduction. NOTE TO CONSULTANT: Consider highlighting the additional benefit that RRSP contributions can provide for some individuals, such as increasing refundable tax credits like the Child Tax Benefit which is based on family income.
There has been a misconception in some circles that spousal RRSPs are no longer necessary due to pension income splitting, but that is not necessarily true. For example, spousal RRSPs are still useful in a few different scenarios. When individuals need or want to split the income derived from RRSP withdrawals prior to age 65 or when the intent is to split more than 50% of RRSP income (spousal RRSPs allow individuals to split up to 100% of their RRSP income). Spousal RRSPs also allow an individual over the age of 71 to continue to make contributions, as long as they have contribution room and their spouse is less than age 71. Spousal RRSPs can also increase amounts available under the Home Buyers Plan or Lifelong Learning Plan since each spouse can withdraw up to the limit from RRSPs they own. In order to discourage the abuse of the spousal RRSP concept, the Income Tax Act contains provisions which will tax certain withdrawals from spousal plans in the hands of the contributor spouse. These provisions are referred to the spousal RRSP "attribution rules". When an amount is withdrawn from a spousal RRSP the lesser of (a) and (b), as follows, must be included in the contributor spouse's income for the year of withdrawal: The amounts withdrawn from a spousal RRSP The amounts contributed by the contributor spouse to any spousal RRSP in the year of withdrawal and in the two immediately preceding calendar years This means that the annuitant spouse must wait approximately three years after the last contribution to a spousal RRSP before a withdrawal could be made without affecting the taxable income of the contributor spouse. By contributing to a spousal RRSP before the end of the current year rather than waiting until the first 60 days of the following year, the three year attribution period starts one year earlier. This means that, assuming no further spousal RRSP contributions are made in the coming years, a spouse could withdraw funds from a spousal plan in 2015 if the last contribution was made in 2012 . If the last contribution was made in the first 60 days of 2013 , the attribution rules would continue to any withdrawals in 2015 , even though the contribution can be deducted on the 2012 tax return. In an extreme example, contributing on December 31 st versus January 1 st (one day earlier) of the following year cuts the attribution period by one year. Minimum amounts received from a spousal RRIF are not subject to these attribution rules. Note that the minimum amount from any RRIF is zero in the year it is established. Also, the RRIF minimum is zero in 2012 for persons who attain age 71 in the year.
Individuals cannot own an RRSP past December 31 st of the year in which they turn 71 years of age. By December 31 st , the RRSP must be: collapsed and tax paid on the fair market value of the plan’s assets used to purchase an annuity transferred to a RRIF Since your RRSP must be wound-up by the end of the year in which you turn 71 years of age, your RRSP contributions for the year must be made by December 31 st . You do not have the extra 60 days after the end of the year as you have in the past. If you have earned income in 2012 and will thus generate RRSP contribution room for 2013 , consider making an overcontribution to your RRSP in December 2012 (before winding it up) for this additional room. The contribution will be deductible on your 2013 income tax return. You will have to pay a 1% per month penalty tax for the amount of the overcontribution exceeding $2,000, but this penalty will only apply for December 2012 since the additional RRSP contribution room will be created as of January 1, 2013 . In most cases, the additional tax saved plus the tax deferral on the investment income earned within the registered plan in future years will more than offset the penalty tax. Take for example, a 71 year old individual in Manitoba in the highest marginal tax bracket of 46.4% who is still working. He will create RRSP contribution room of $ 23,820 in 2013 . If this individual makes an RRSP contribution of $ 23,820 in December, their penalty tax would be 1% of $23,820 minus the $2,000 over-contribution cushion, or 1% of $21,820 = $218 . If this individual is still in the highest tax bracket in 2013 , the RRSP deduction would result in a tax savings of approximately $ 11,052 . If there is a younger spouse, spousal contributions can continue to be made even after the year in which you turn 71 to use any unused or new RRSP contribution room. This can be done until the year in which the spouse turns 71 years of age.
Individuals who are considering using the Home Buyers‘ Plan near the end of the year can benefit from delaying participation in the program until the start of the following year due to the fact that it can extend both the time period allowed for purchasing a home and the start date for repaying the amounts withdrawn by one year. Individuals participating in the Home Buyers’ Plan must purchase a home by October 1 st of the year following the year of the withdrawal. Thus, a withdrawal on December 31, 2012 would only give the participant until October 1, 2013 to purchase a new home compared with a withdrawal on January 2, 2013 , two days later, would allow the participant until October 1, 2014 to purchase a new home, providing much greater flexibility by extending the deadline by one full year. HBP repayments must begin 2 years after the year of the withdrawal. Using the same example, a withdrawal on December 31 st , 2012 would result in a required repayment in the 2014 taxation year, while a withdrawal on January 2, 2013 would not require a repayment until the 201 5 taxation year (contributions made up to March 1, 2016 could be designated as repayments for 2015 ). Multiple withdrawals to a maximum of $25,000 are allowed under the HBP, but all withdrawals must be made in the same calendar year. Therefore if a participant is not withdrawing the maximum in 2012 and wants to take more funds out under HBP in the future, they should delay participation until 2013 to allow greater flexibility. If HBP withdrawals have been made in 2012 , individuals should ensure all additional withdrawals are made by December 31 st 2012 , assuming they have still not purchased their home. Remember the HBP max withdrawal limit is $25,000. Individual that have already participated in the program and have a repayment due in 2012 should remember to make the required repayment by March 1, 2013 , otherwise the required repayment amount will be included in their income for 2012 .
If your child is turning 15 this year, then you have to take certain steps to ensure that the child will be eligible to receive the Canada Education Savings Grant (CESG) next year and the year after – i.e. in the years when the child turns 16 and 17. By the end of this year, you have to be able to show that either: You contributed at least $2,000 to an RESP for your child (and did not withdraw it), or You contributed at least $100 to an RESP for your child in any given 4 years (and did not withdraw it). So if you’ve never established an RESP for your child before, but he or she is turning 15 sometime during this calendar year, now is the time to act! Consider contributing at least $2,000, and maybe even $5,000, so as to collect some CESG this year, and preserve the right to get it in the following 2 years. If you’ve already been making RESP contributions for your child, congratulations! But don’t forget to keep on making those contributions, whether in annual lump sum amounts, or through Pre-Authorized Chequing arrangements. If your child still has CESG room accumulated and carried forward, then you’ll probably want to contribute $5,000/year until you get all caught up, after which reducing your contributions to $2,500/year may be suitable. But you could also choose to make contributions over and above what you need to get the CESG, so as to enjoy the benefits of tax-deferred compound growth.
While “in-kind” transfers to a TFSA are technically allowed there are a few points to be aware of. First, if the non-registered investment has a capital gain, the gain will be triggered for tax purposes. Secondly, if a capital loss results from an “in-kind” transfer the loss will be denied. Individuals who are going to transfer current non-registered investments into their TFSA should consider using investments with capital losses. Due to the stop-loss rules that would deem the loss to be nil, individuals should ensure they trigger the capital loss at least 30 days prior to repurchasing the same or similar investment inside or outside of the TFSA. They could dispose of the investment on December 1 to trigger the loss and leave it invested in money market funds until January 2 when they could invest in a TFSA and re-purchase the original investment. Alternatively they could sell the investment and use the cash proceeds to contribute to a TFSA, then wait 31 days before re-purchasing the original investment. If near the end of the year an individual is considering making a withdrawal from a TFSA, they should make it before the end of the year rather then early in the new year. This would provide them with increased contribution room one year earlier. If an individual makes a $2,000 withdrawal from their TFSA in December of 2012 , they will have their contribution room increased by $2,000 for 2013 , however if they do not make the withdrawal until January 2013 , then the contribution room increase will not occur until 2014 . Thus a withdrawal made one month (or even a few days) early creates contribution room a year earlier.
Form RC240 http://www.cra-arc.gc.ca/E/pbg/tf/rc240/rc240-12e.pdf Remember it might be easier to make the spouse a successor holder to avoid having to make a transfer of the TFSA proceeds and the filing the form RC240.
Individuals are taxed on a calendar year basis, so December 31, 2012 is the last day for most transactions that affect your 2012 income taxes. Most items that are eligible for a tax deduction or tax credit must be paid by the end of the year (some exceptions, such as medical expenses or RRSP contributions). Individuals should plan the timing of their payments to maximize their tax advantage.
The list above includes some of the more common expenses that should be paid in the year to maximize the applicable tax deduction or credit (there is an exception for medical expenses that we will see in a few slides). In addition to ensuring all amounts that are due in the year are paid in the calendar year (i.e. child care expenses, investment expenses, alimony and maintenance), there are some other strategies that can be used to maximize the tax advantages. The more common ones will be discussed on the next few slides.
Federal Credit: first $200 @ 15% over $200 @ 29% Provincial tax credit is calculated at the lowest tax rate on the first $200 and the highest tax rate on donation above $200 except for the following provinces: In Alberta, the tax credit rate on the first $200 of donations is 10% and on donations above $200 is 21%. In Quebec, the tax credit rate is 20% on donations up to $200 and 24% on donations above $200. The CRA’s administrative policy is to allow spouses to claim charitable donation receipts made out in either their name or their spouse’s name. Consider combining charitable donations made by each spouse and claiming the total donations on one return to maximize the charitable tax credit. If an individual typically donates small amounts every year, they should consider combining two or more years of donations into one year. This would put more or the total donation over the $200 annual threshold and generate a larger combined tax credit. Maximum claim is 75% of the individual’s net income for the year and increased to 100% for the year of death. If donations total more than the income threshold in any particular year, the tax credit can be carried-forward to any of the following five years. An individual can also choose not to claim a donation credit in the year of the donation and rather claim it in any of the next five years. This may be advantageous if they anticipate making a large donation in the following year in order to maximize the tax credit. Rather than donating cash, an individual should consider donating publicly traded securities or mutual funds. The tax credit is calculated in the same manner (i.e. based on the fair market value of the gift) , but none of any capital gain resulting from the donation will be included in income where the donation was made after May 2, 2006.
Rather than donating cash, an individual should consider donating publicly traded securities or mutual funds. The tax credit is still calculated based on the fair market value of the gift , but when calculating the taxable capital gain, the inclusion rate is 0% for the donation rather than 50% if the donation was made in cash after disposing of the investment. For example, let’s assume an individual living in British Columbia has non-registered mutual funds with a fair market value of $100,000 that they wish to donate to a charity. She is in the highest tax bracket in BC , therefore her marginal tax rate is 43.7% The capital gain on these funds is $20,000. If she were to redeem these funds and make a cash donation she would have a taxable capital gain of $10,000 due to the 50% inclusion rate for capital gains and would have $4,370 of tax payable. However, if she were to simply donate the mutual funds “in-kind” she would still have a capital gain of $20,000, but the taxable capital gain would be nil due to the 0% inclusion rate on “gifts in kind” resulting in a tax saving of $4,370 to her.
Contributions to federal political parties or to candidates in federal election campaigns qualify for the Political Donation Tax Credit. The tax credit for political donations starts out at a very generous rate of 75% for the first $400 of donations and is reduced as the donation increases until the federal credit is eliminated for donations above $1,275. This results in a maximum federal credit amount of $650 for political donations. Remember that most provinces have a political donation tax credit as well, but only for provincial donations. If clients make political donations on a regular basis, they are better off contributing no more than $400 per year to maximize the tax benefit of this donation.
The threshold for 2012 is 3% of net income until net income exceeds $70,300 , at which point the threshold becomes a flat $2,109 . Only expenses beyond this threshold are eligible for the medical expenses tax credit. Medical expenses can be claimed by picking any 12-month period ending in the year. For example, if no medical expense claim was made for any expenses incurred after May of last year, this year’s claim can include any 12 month period starting in June of last year and ending no later than December of this year. In the year of death, medical expenses can be claimed for any 24 month period that includes the date of death. Because of the 3% income threshold, family medical expenses should be combined and claimed on only one tax return. It is usually better for the spouse with the lowest net income to make the claim, provided they have sufficient income tax to pay to make use of the credit. Plan medical expenses to maximize your claim. Consider incurring some necessary but possibly discretionary expenses within the chosen 12 month period (i.e. dental work which could wait but would be better to claim within the chosen period).
To maximize the credit, each spouse should aim to have at least $2,000 of qualified pension income annually as unused credit cannot be carried forward, although this will result in some provincial taxes payable. If a person is 65 or older, they should arrange to receive $2,000 of qualified pension income before the end of the year by using a RRIF to generate income or by purchasing a non-registered annuity. Remember that only the income portion of the non-registered annuity payments is considered qualified pension income for purposes of this credit. The pension income splitting rules present an opportunity for spouses who previously did not have any “eligible pension income” to qualify for the pension income credit. The “eligible pension income” that is being split retains its’ character when allocated to the other spouse. Therefore, the spouse who is allocated the pension income may be able to qualify for the pension income credit as long as they meet the age requirements. For example, a spouse who is 65 or older and allocated RRIF income would qualify for the pension income credit, but a spouse under the age of 65 would not qualify for the pension income credit even though they are eligible for pension income splitting.
The children's fitness tax credit allows parents to claim a maximum of $500 per year for eligible fees paid for each child who is under 16 at any time during the year (or under 18 if eligible for the disability amount at the beginning of the year in which an eligible fitness expense was paid). As with most other non-refundable tax credits, the credit is calculated by multiplying the eligible amount by the lowest marginal tax rate (15% in 2012 ). The year in which the tax credit can be claimed is determined by the date when the fees are paid, not when the activity takes place. Therefore, if an individual does not have enough fees in the current year to maximize the credit they could prepay fees for the following year and still claim them for the credit in the current year. The children's arts tax credit also allows parents to claim a maximum of $500 per year for eligible fees paid for each child who is under 16 at any time during the year (or under 18 if eligible for the disability amount at the beginning of the year in which an eligible arts expense was paid). As with the children’s fitness tax credit the year in which the tax credit is claimed is the year in which the fees are paid, not when the activity takes place.
A business can be operated as a proprietorship, a partnership, or within a trust or a corporation. Corporations can have any 12 month period year-end they chose. They do not need to have a December 31 st year-end, and in fact many do not. Individuals are taxed on a calendar year basis, so December 31, 2012 is the last day for most transactions that affect your 2012 income taxes. Business owners who operate their businesses personally or in a partnership will need to calculate their business income on a calendar year basis. Regardless of the legal structure of the business and its year-end, there are “year-end tax planning tips” which apply to all businesses.
Applicable whether you carry on a business personally or through a corporation. Salaries paid or accrued to a spouse or child can reduce the business owner’s income and be taxed in the spouse or child’s hands, possibly at lower marginal tax rates than if the income had been earned by the owner. The net tax saving is the difference in tax rate between the owner (as high as the highest tax rate in your province) and the family member (as low as 0%). This is a great income-splitting technique. Salary must be “reasonable” based on the services performed by the spouse or child for the business. The general rule is that the salary should be comparable to what would be paid to a non-related party for performing the same work. The basic personal amount for federal tax purposes is $10,822 for 2012 . Salary is earned income for purposes of making RRSP contributions. This allows the spouse and children to create RSP contribution room for future years (ensure they file a tax return to report the salary). Salary paid to a spouse would be considered pensionable earnings for CPP purposes. CPP rates for 2012 : Employee contribution rate is 4.95% of pensionable earnings Maximum pensionable earnings are $50,100 Basic yearly exemption is $3,500 Maximum employee contribution is $2,307 CPP contributions only start when employee is 18 years of age, so would not be applicable for salaries paid to minor children. Salaries paid to family members are generally not subject to Employment Insurance premiums.
Capital assets can be depreciated for tax purposes at various rates depending on the type of asset. Each type of depreciable asset falls into a specific type of asset class with a prescribed capital cost allowance (CCA) rate. If an asset is acquired and available for use before year-end, the business can claim one-half of the usual CCA rate. Even if the asset is acquired late in the year, a full year’s CCA can be claimed on the asset at ½ of the normal CCA rate. By accelerating the acquisition of a planned purchase into the current year, not only can ½ of the full year’s CCA be claimed for tax purposes, but next year’s CCA will now be at the full rate and not be subject to the half-year rule.
Since 2001, the CRA has allowed employers to pay tax-free gifts and awards to employees, subject to certain conditions. The employer can deduct the cost of the gifts and/or awards. In both cases, the total cost of the two gifts, including taxes, cannot exceed more than $500 per year. Where the cost of the gifts or awards exceeds $500, the full fair-market value of the gifts or award will be included in your income. The gift or award cannot be in the form of cash or a gift that can easily be converted into cash, such as a gift certificate. This policy does not apply to gifts and awards given by closely held corporations to their shareholders or their relatives as these gifts or awards would normally be considered to be received by the individuals in their capacity as shareholders and not as employees
This change will cause a lot more partnerships to be required to file the T5013 Information returns with CRA. This could be an increased cost for accounting fees.