November 5, 2020…Lots has changed in world finance since my last post. Clients who have heeded my capital management counsel have benefitted from a strong move in precious metals prices. It wasn’t easy to question the Wall Street status quo but inherent risks to the monetary system cannot go unnoticed. Governments continue to burden future generations with debt and it’s concerning. Our Canadian government may ultimately decide to turn to higher net worth Canadians to help mitigate damage to fiscal finance because of COVID measures. Could the capital gains inclusion rate be on the table as we speak. Potentially. Investment savvy folks will be focusing on self directing their TFSA in context of instinct and education. There’s never been a better time for entrepreneurs to execute amidst all the dithering of today.
Oct 26, 2017…Corporate federal tax rate to be reduced to 9 per cent by 2019. Dividend sprinkling to undergo capital contribution tests and evidence of spouse business participation in order to qualify for income distribution within the family. This should prove interesting as details are rolled out. Meanwhile taxpayers will be burdened by yet another unexpected legal settlement – this time with ill treated CSIS employees.
Feb 26, 2017….With the RRSP contribution deadline approaching (Mar 1), contributions are more relevant than ever for the high income earner.
Jan 21, 2017….Personal tax changes of note for the 2016 tax year: Second federal bracket moves from 22 % to 20.5%. Additional bracket added in 2016 for incomes over $200,000 – 33% federal. Family tax cut (the income splitting mechanism for families with children) is gone. Although the arts and fitness credits will be gone in 2017, they are still applicable for 2016. Child tax benefit program and UCCB program. The UCCB RC62 slip will still apply for 2016 but will go away for 2017. The program has now been amalgamated with the Child Tax Benefit to form the new Canada Child Benefit program.
March 29, 2016….March 31st deadline for annual GST filers having a December 31st period end. Budget – family tax cut (income splitting for couples with kids) is gone, UCCB and CTB replaced by new Canada Child Tax Benefit (CCTB) which is going to more generous and tax free. More direct assistance to students with removal of textbook amount. Fitness and arts credits gone.
Jan 5, 2015….You’ve heard about it in the news. Income splitting for couples with children under 18 is the most significant news for the 2014 tax year. Up to $2,000 in tax credits available.
Sep 24, 2014….The CRA will be phasing out refund cheques for personal tax accounts by 2016. If you haven’t done so already, consider having your tax preparer remit your banking info with your next tax return.
Aug 18, 2014….Penalties arise from mishandling the TFSA account. Tread carefully. Did you know that paying tax by cheque is a great method because a cancelled cheque is virtually foolproof in verifying payment. Never forget to include remittance advice. Bookkeepers love cancelled cheques when booking entries.
Jul 2, 2014….New tax preparer registration requirement appears to be coming down the pipe. Subject to legislation, your government will be monitoring your tax preparer more closely. Feedback forums were held back in February.
Feb 11, 13….Your government asked for my input today regarding the new proposed “Tax Preparer’s Registration Program”. Possibly more regulation coming down the pipe. Lots of loose ends and blanks to fill in with possible implementation by 2016-17. Must pass legislation – should be a long haul. Vibrant consultative session with Calgary practitioners at SAIT. Possible outcome – all paid tax preparers to be registered with sanctions in play and obvious increased audit environment.
Oct 31, 13…The Harry Hays building downtown Calgary no longer has a tax desk open as of Oct 1, 2013. It used to be a one stop resource for taxpayers wishing to make payments, procure resource material, and inquire on accounts. Other regions across Canada have been dealt the same fate. Consequently, it has become very difficult lately to get through on the 1-800 numbers. You deserve better as a tax payer in this high tax country. Form RC193 can be submitted to the CRA as a mechanism in dealing with service issues.
Oct 12, 13….Are Canadian adults also going to receive a fitness tax credit similar to their kids. Stay tuned.
July 16, 13….U.S. citizens residing in Canada need to keep compliant with the I.R.S. Are you a Canadian who has purchased U.S. investment property? You too may be requiring the services of a seasoned tax professional.
Dec 18, 12….Your government apparently does not believe you save enough for retirement. Hence; politicians are considering raising CPP premiums. Does your corporate dividend need more weighting?
Aug 14, 12…Younger generations are legitimately concerned about the strength of the CPP program and young entrepreneurs in particular have CPP premium contribution considerations when devising a tax planning strategy. Matching employer CPP contributions turn the proposition of high salaried shareholder income into something that should be revisited.
Is your company eligible for the corporate small business deduction?
June 6, 12…Your federal government as you are likely now aware has implemented another retirement savings vehicle called the TFSA. The question that now arises is whether one should contribute to the TFSA or continue utilizing the RRSP considering cash resources may be limited.
The plans differ. Incomes and lifestyles and tax planning considerations come into play when allocating retirement resources. The organized tax planner typically benefits most financially during the retirement years.
Aug 30, 11…RESP’s are an effective tool for planning the finances of your children’s education. Since there is grant money available (20% of contributor’s amounts subject to maximums) one might as well reap the benefit. Not all kids will attend but keep in mind that plans are transferable between children. Although contributed amounts are not tax deductible by the contributor, investment earnings inside the plan will grow over time and the student is taxed at the back end when he / she is low income when attending post secondary. Only the grant portion and investment earning portion of the plan becomes taxable.
June 2, 11…Notice of Assessments for personal tax returns should now be received. It is important to review your assessment against your return for any variance. The CRA has a timeline associated with objecting to a variance.
Mar 17, 11…I often have corporate clients indicate that they enjoy using their personal credit cards because of a loyalty program associated with developing point pools on the card. You may or may not have known that the CRA has been wanting to charge a taxable benefit for accruing these points for personal benefit. However; it has been established that no amount shall be included in an employee’s income, so long as the point are not converted to cash, the arrangement is not indicative of an alternative form of remuneration, and the arrangement is not for tax avoidance purposes. The CRA’s decision was certainly influenced by the potential for increased compliance and enforcement measures that would ultimately be deemed too costly in respect of relatively small tax revenue amounts.
Feb 8, 11…..Just a quick word on what you’ve been hearing in the news about corporate tax rates. Indeed there’s been a reduction of 1.5 per cent but this reduction does not apply for CCPC’s (Canadian Controlled Small Business Corporations). In other words, it’s big business that benefits and not small business. Incidentally, my MP sent some literature in the mail today boasting about the tax reductions implemented since Harper took office and I suspect it’s in response to the political hay being made about this recent corporate tax reduction measure.
Dec 6, 10…..Sveinson Financial has moved the office with you in mind. This is a convenient location in the new Medallion Centre near 16th Ave NE and 19th Street. You’re going to enjoy the new look and feel.
Sept 15, 10….Have you filed one of those controversial “gifting tax shelters”? If so, you are going to be reassessed. The CRA has targeted approximately 170,000 Canadians who have filed these and they are going back to 2003. This will end up being a very significant tax hit to those individuals that thought they had a large donation tax credit in the bag.
July 16, 10….The CRA is about to rewrite the rules on foreign property disclosure. Your government is about to ameliorate the tax burden for those that voluntary disclose their funds in off shore accounts. Word is that they’ll be going back to the year 2000 to catch up on dividend and interest income on money owed since this date. They may also be asking questions with regard to the source of principal amounts. We’ll see if they are serious about compounding interest and penalties from 2000 as well.
Jul 13, 10…Housing starts in Calgary are up and prices are on the decline. Year over year sales in May 10 compared to May 09 are down over 40 per cent. Suddenly, the talk on news channels has much to do with deficits and debts in lieu of troubles faced by Portugal, Italy, Ireland, Greece and Spain. In fact, the U.S debt when measured against GDP is actually larger than Spain’s (61% vs 56%). What does all this mean for you? Well. It’s time to batten down the hatches because creditor nations are going to be demanding a higher return on their investments. Interest rates are going up. It’s been a fine ride for those that have borrowed at two while reaping double digit gains. A conservative approach to investing is taking shape. I need not tell this to those of you that have seen your principal deteriorate over the past three years. Easy money still has legs left but if the world order wants to maintain a currency system without backing to gold then the money supply must be constrained. I’m watching for entitlement reform in the U.S to start taking shape as a first indicator that Obama takes this issue seriously.
May 18, 10…Well. Tax season has come to a close and in review there were some trends. The one particular transaction that stood out was the strong number of folks taking advantage of the HRTC (Home Renovation Tax Credit). Good for you! The program was obviously a success but apparently had an impact on the ability of you to make RRSP contributions. Many of you have seen a ride back up in your RRSP valuations. You’ve heard me say it before. Please keep a tab on how you are invested and make certain that your investment advisor is providing you with strong rationale for what he / she is doing with your account with your permission. For those of you self-directing your account, please continue to update yourself on economic events and remember to acquire your information from multiple sources. The loudest are not always the brightest.
Nov 16, 09…Hello all. By now, if your company has issued dividends in the past, you will have received in the mail from the CRA a letter that describes a new account that has been opened which has an RZ suffix associated with your Business Number. Don’t be alarmed. Your federal government has come up with a tracking number system that your tax preparer (moi) uses when preparing T5’s and T5 summaries. You need not take any action. Simply file your letter.
Oct 27, 09…So you’re considering going into business. Great idea! Do you have the stomach for it? Are you a risk taker by nature? Can you handle temporary set backs, rejection and accounts receivable. Do you possess the required skill set to succeed? Well, some businesses have more risk associated with them than others. Here is the good news. Your government understands that business entails risk and they give you a tax benefit if you struggle in the beginning. Few businesses get right out of the gate with windfall profits. It typcically takes time to build. The CRA allows what’s called non-capital losses to be carried back three years and forward for 20 years. What does this mean? Well – the net business loss that you may incur can be applied to income in your prior three tax years and forward 20 years. It’s important to apply these losses carefully to take full advantage of the basic exemption.
Oct 15, 09…Manufacturing numbers out this morning in the U.S. show sizeable upticks while first time jobless claims dropped for the second month in a row. Michigan tops all states in unemployment with a rate of 15 per cent. Nevada and California are not far behind. In spite of high natural gas inventories, the November futures price has near doubled since mid September which may put a few more rigs back to work in Alberta this winter. Harper makes the news with a carbon capture agreement in conjunction with plans for a coal fired power plant near Edmonton. Apparently, the technology of storing CO2 is still unproven but what better way to announce new coal power.
Steady Eddie Stelmach (starting to wobble) claims that taxes will not rise. Dr. Jack Mintz thinks otherwise. “If you had an 8% (sales) tax, you could cut personal and corporate taxes by half, from 10 to five,” Mintz said.
Sep 10, 09…Undeniably the bailout of the the financial system by the U.S Federal Reserve and central banks world wide have created the intended affect of easing liquidity issues thereby preventing any domino like failures of large scale firms. With the increase in the money supply, the debt and deficit of the U.S government is appearing barely tolerable. Pundits are predicting only slow growth going forward which arguably may be too slow to keep pace with the shortfall. As expected, precious metals prices have seen an increase of late and may very well continue to rise in the face of inflationary pressures given the dramatic monetary stimulus.
Aug 20, 09…It’s time to get serious about utilizing the Home Renovation Tax Credit (HRTC). Although there’s a possibility that your government may extend the program past February 1st, 2010 – if you want to be certain about exploiting the program, the time to plan your job is now. Keep in mind that the CRA asks you to keep excellent records of the work being done. You will want to use a contractor that is reputable and is GST registered. This contractor will provide you with an invoice that has the detail that the CRA requires should the job fit the parameters of the program. Contractors should have their company header information on the invoice that includes their address and phone number. The body of the invoice will describe the work done on an itemized basis along with the costs. In the event that material needs to be delivered to your residence, a packing slip must be forwarded with the date and address of delivery. The contractor / vendor’s invoice must also include the firm’s GST number. All firms with sales over $30,000 must own a GST number and if they can’t provide you with one, the firm either has annual sales under $30,000 (is this the kind of contractor you want to use?) or they purposely do not want to provide the number. I strongly encourage everyone to insist on using a GST registered business for the work.
Examples of jobs qualifying:
Window / door replacement
New kitchen cabinets
You will be granted a non-refundable tax credit of 15% of the work done between $1,000 and $10,000 and one nicely improved home for your family.
July 30, 09…Ben Bernanke has been doing town hall meetings talking to everyday folks in support of the Fed’s stimulus and TARP (Troubled Asset Relief Program). The massive injection of new money has effectively stimulated capital markets and brought the financial system back from the brink and apparently the next step is to impose necessary regulatory reform. Maverick like risks in derivative instruments by banks must ultimately be restricted in order to prevent future banking bail outs by taxpayers. This reform appears to be moving at a snails pace. Watch out for the Wall street back lash. Generational debt doesn’t yet appear visceral in the conscience of Capitol Hill law makers.
June 8, 09…The first tax account that you need to pay on time every month before the 15th is your payroll remittance. Penalties run at 10 per cent for missing the deadline and then jump to 20 per cent after a warning. Doesn’t the CRA get enough of your money without sending in penalty amounts?
May 21, 09…Mr. Mulroney has concluded his testimony at an inquiry hosted by you the taxpayer at an estimated cost of $2 million. You will be amused / confused / angered / distraught / befuddled / exasperated / or even unsurprised by revelations that only half the cash received by Mr. Mulroney was included in his income albeit late as per a special disclosure made on his behalf by his lawyer. You, on the other hand get to continue disclosing all over your income and if you are late in filing your income, you will be charged interest and penalties. I’ll be thinking of Mr. Mulroney, his lawyer, the Canada Revenue Agency, and the Canadian flag on July 1st upcoming.
Apr 21, 09…With tax season winding down, I’d like to remind all proprietors that the CRA will charge interest on tax balances for returns filed between May 1st and June 15th. However; the penalty is a applied for returns filed after June 15th. I’d like to take this opporutnity to thank all clients for their cooperation in turning around queries in a timely fashion. Your organization and spirit of compliance is admirable.
Feb 13, 09…This financial crisis unfolding (yes, I use the present tense) has been anticipated by think tanks far removed from political officials, media elite, or investment houses. Folks such as Ian Gordon, Jay Taylor, Doug Casey, Jim Willie, Peter Grandich, Bill Bonner, Bob Moriarty, Richard Russell, and Roger Wiegand have been talking about the lack of transparency in our financial system for some time now. The above gentlemen in their relative obscurity have been advising that massive injections of new dollars to the money supply and the corresonding debt created will be destabilizing to the financial system. Here we are. Major American banks have been consolidated, one in nine houses in the U.S is now vacant, projections of up to two trillion dollars in stimulus cash is being touted, banking officials are cowering before congress, and new jobless numbers chase records set by the Great Depression. It pays to be watching the macroeconomic picture independently!!
Feb 11, 09…T4, T5 slip preparation deadline is looming. Do you need to file a dividend?
Jan 28, 09…The 2009 federal budget has been released and apparently it will meet with approval from the official opposition. So what about the tax effect? Well, if you are a business person, you will benefit from a 100% write off of computers over the next two years. There’s been an adjustment to the first two tax rate threshold amounts and the basic personal exemption. The basic personal exemption moves from $9,600 to $10,320. This is your tax free money. The first rate threshold in which you’re taxed federally at 15% moves from $37,885 to $40,725. The second rate threshold at the 22% rate moves from $75,769 to $81,450. There is a new working income tax benefit that encourages low income folks to work more. It has essentially been doubled from ’08 to ’09. A non-refundable credit of $10,000 for home renovations will effectively provide $1,350 of tax savings for those that utilize the program to its maximum. The income level at which child tax benefits are phased out has been raised and the EI contributory rate has been frozen.
From a more macro sense, there will be investments to equip a fledgling economcy. A Canadian Skills and Strategy program will benefit from an $8.3 billion investment. The housing and construction industry will tap into $7.8 billion for quality housing and $12 billion in infrastructure stimulus. Targeted support in the amount of $7.5 billion will go toward particular sectors, regions, and communities, and industries.
Jan 19, 09…Don’t forget to optimize the the time value of tax free money generated through the new Tax Free Savings Account (TFSA). This new savings vehicle now available to all Canadians permits interest, dividends and capital gains to accrue tax free inside this account. Unlike your RRSP contributions, you will not get the tax deduction, but the tax free compounding of investment income earned in the TFSA can really add up over time.
Nov 10, 08…It’s a rough ride out there right now regardless if you’re in the markets, looking for work, or negotiationg contracts. Commodity prices have fallen off a cliff and mining operations are shutting down across the globe. Central bankers are scrambling to ease the credit crisis and car makers go begging for bail outs. Our monetary system is encountering pressure as witnessed by wide fluctuations in exchange rates. Batten down the hatches? Well yes, but keep your eyes peeled and monitor your ways and means of a livelihood during this turbulent time.
Oct 21, 08….Bud Burrell was recently interviewed on financialsense.com. As a savvy market veteran, Bud believes that Canadian junior resource companies actively pursuing success through equity issues in the public market are destined for despair due to the illiquid Canadian markets and the prolific naked short selling perpetrated primarily by junior brokerage firms. He references the “carpet bombing” that typically attacks the market up to one half hour before the close of trading. Short selling has surfaced in the mainstream media lately in the context of Wall Street’s financial crisis. The U.S administration halted short sales of financial firms as a temporary measure during early October’s tumultuous trading days. The jury is still out on the merits of short selling. In the absence of a regulatory mechanism, the activity seems more like fraud than the perceived benefit of balancing the market.
Oct 9, 08…..Portfolio analysts and the mainstream media have been off the mark again with respect to counselling their clients. The TSX is has lost 30 per cent of its value over the past years and investors are grumpy. The mantra of “buy and hold” has not worked out so well for most. Sveinson Financial continues to counsel clients to become actively educated in their own investments. The financial crisis has been predicted by alternative economic thinkers that have traditionally been scorned by investment professionals.
Roger Wiegand of Trader Tracks forecasts continued inflationary pressures given the recent large monetary injections by the federal reserve. Active monetary management is deemed to have ultimate consequences by way of a continued depreciation of the U.S dollary. He is predicting robust upward moves in the gold price come mid January of 2009.