Wealth Management - Investment Advice

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Tax Savings Ideas
2006-12-20

Investment Advice Bradley Roulston, BA, CFP, CLU, RHU
Thanks to the informative staff at Berg, Naqvi, Lehmann for their assistance.

Cash-flow is increased by tightening either your Tax, Debt management or Personal expense drains. Remember, wealth management isn’t how much you make, it is how much you Save that counts!

Here are a few ideas to tighten your tax-drain. Contact your accountant or myself at broulston@nelsoncu.com (352-9256) for more information. Seek professional advice before implementing any of the following strategies

1) Defer purchasing a non-registered fund until Jan. 1st to avoid 2006 distribution taxes. If planning on selling, do so before distribution dates.
2) Selling capital losses can offset capital gains.
3) Maximize your RSPs and start as young as possible. If you don’t need your RSP deduction, you can still shelter your money and claim the deduction in future when your tax rate is higher. Get a bigger bang for your RSP buck.
4) If you are over 69, but your spouse isn’t– you can still make a contribution to his/her plan if you have RSP room.
5) RSP contributions can be made until Mar 1st’07, however, if the beneficiary of the plan turned 69 in 2006 – contributions must be made by Dec 31st’06.
6) All donations should be claimed by one spouse to maximize donation credits. Consider donating securities for better tax treatment.
7) All medical expenses should be claimed by the lower income-earning spouse to maximize medical tax credits. You can use any 12 month-rolling period, not necessarily Jan-Dec timelines.
8) New tax deduction for employed tradesperson up to $500 for required tool purchases if bought after May 1st’06. Consider buying tools before year-end.
9) Deductions for home office, meals & entertainment and vehicle are possible for employees if a ‘Conditions of Employment’ form is applicable.
10) RESP contributions must be made before Dec. 31st if your child turned 17 this past year.
11) Income split wherever possible. Equalize current and future incomes.
12) Beware of tax-shelter donation arrangements and gifts of property
13) A big-fat tax-refund is a bad thing! Complete a T1213 form, reduce your tax withholdings and increase you monthly cash-flow.
14) Best to borrow only for investment or business purposes (and to buy your home). Otherwise, pay in cash only – don’t debt finance for personal spending. Debt swap to deduct interest wherever possible.
15) Meet an accountant now to arrange your affairs in the most tax-efficient manner – don’t wait to ask ‘how did I do last year’!

Have you made an appointment for your Financial Hike yet??? Comprehensive financial planning for NDCU members. Call us today to book a meeting!

Information contained herein is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions.
The articles and opinions in this newsletter are for general information only and are not intended to provide specific advice or recommendations for any individual.