Master Your Taxes Game

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Master the Big Picture

Change the Game: You First

Family Next: Powerful Income Splitting Opportunities

Occupation: Masterful Career Moves

Finances: Your Tax-free Nest

Finances: Tax Preferred Investment Strategies

Finances: Managing Dispositions of Your Assets

Future: Transitioning into Retirement

Master the Process

Avoiding Trouble

Master Your Taxes Game

Master the Big Picture

Q1:	How do you know if you are ready to Master the Big Picture?

Things You Need To Know:

Real Wealth Management is the after-tax, after-cost and after-inflation result of accumulation, growth, preservation and transition of wealth.
Tax efficiency is the skill of managing the dollars you make and save, so as to receive them first, keep them in your pocket longest, ultimately to pay the least possible tax as a family unit.

Questions You Need To Ask:

What income sources should I be earning to maximize tax efficiency?
How can I qualify for more tax deductions, credits and social benefits?

How do you know if you are ready to Master the Big Picture? Choose the Best Answer:
	1.	When you are willing to invest your time to learn more about reducing taxes to build more wealth.
	2.	When you get a raise each year.
	3.	When you have little to no wealth to master.

Master Your Taxes Game

Change the Game: You First

Q2:	How can you improve your financial success by putting "you" first?

Things You Need To Know:

Holding more of your money sooner and for longer can help you build more wealth.
By minimizing tax withheld at source, tax payers have more money to fund wants and needs and invest in the future.

Questions You Need To Ask:

How can I diversify the income I receive from employment?
What are the significant tax filing milestones I need to be aware of throughout my lifetime?

How can you improve your financial success by putting "you" first? Choose the Best Answer:
	1.	Make sure you invest in an annual vacation before saving and investing for the future.
	2.	Try to leverage your corporate employer’s bigger after-tax dollars by negotiating an interest free loan, sponsorship of your education, use of a car, etc.
	3.	Treat yourself to a regular “spa” day so that you look your best at all times.

Master Your Taxes Game

Family Next: Powerful Income Splitting Opportunities

Q3:	Can you build wealth more efficiently as a family?

Things You Need To Know:

Filing tax returns together as a family has its advantages, particularly if you start with the lowest income earner. Many transferrable provisions between family members may apply.
High marginal tax rates, resulting from clawbacks of certain government benefits, can be reduced when a family splits income.

Questions You Need To Ask:

What tax provisions can my spouse and I use jointly or transfer between us?
Will a family trust help our family control more wealth?
How can we convert "bad debt" into "good, tax deductible debt"?

Can you build wealth more efficiently as a family? Choose the Best Answer:
	1.	No, because the tax system already takes this into account.
	2.	Maybe, depending on the situation.
	3.	Yes, by using the power of several individuals’ tax free zones and the progressive nature of the tax system, a family unit can plan to pay less tax overall than individuals alone.

Master Your Taxes Game

Occupation: Masterful Career Moves

Q4:	How can your career strategy impact your ability to build long term wealth?

Things You Need To Know:

There are many tax advantages to being both employed and self-employed at the same time.
Your relationship with the Canada Revenue Agency will change.

Questions You Need To Ask:

How do I plan my tax efficient compensation?
Will my business have a reasonable expectation of profit?
How can I cash in on the Capital Gains Deduction?

How can your career strategy impact your ability to build long term wealth? Choose the Best Answer:
	1.	Plan to work for a large company because they are always better to work for than small companies.
	2.	The combination of employment and self-employment can be a powerful way to both diversify income, reduce taxes and enhance your wealth.
	3.	Plan to work for the government because they have the best benefit plans and compensation.

Master Your Taxes Game

Finances: Your Tax-free Nest

Q5:	How does your home fit into your long term wealth building strategy?

Things You Need To Know:

Your principal residence grows in value tax free.
Buy a house you can afford, pay down the mortgage quickly to save on interest, preserve your wealth for other investments and use the home equity to create "good leverage" for other wealth building opportunities.

Questions You Need To Ask:

How can I maximize the principle residence exemption if I own more than one property?
Should I put the cottage into a family trust to preserve it for the future?

How does your home fit into your long term wealth building strategy? Choose the Best Answer:
	1.	To maximize your long term wealth accumulation you should buy as large a home as possible and pay it off over a long period of time.
	2.	To maximize your long term wealth accumulation you should buy a modest home and pay it off quickly.
	3.	To maximize your long term wealth accumulation you should rent so that you can maximize your other tax free investments into RRSPs, RESPs and the TFSAs.

Master Your Taxes Game

Finances: Tax Preferred Investment Strategies

Q6:	Which should I invest in first: my home, my RRSP or the new Tax Free Savings Account (TFSA)?

Things You Need To Know:

Depending on your circumstances and stage in life the best solution for you may be quite different than for others.
Tax minimization and tax efficiency for both today and tomorrow are the most important objectives.

Questions You Need To Ask:

Which investment options should I choose so as to achieve the correct income results today?
Which investment options should I choose so as to achieve the correct income results in the future?

Which should I invest in first: my home, my RRSP or the new Tax Free Savings Account (TFSA)? Choose the Best Answer:
	1.	In all situations the best approach is to maximize your savings in the RESP.
	2.	In all situations the best approach is to maximize your savings in an IPP.
	3.	In all situations you need to consider the tax implications today, as well as tomorrow, so as to determine the best overall strategy.

Master Your Taxes Game

Finances: Managing Dispositions Of Your Assets

Q7:	Is Selling an Asset at a Loss a Wise Strategy?

Things You Need To Know:

Capital losses can be used to offset capital gains, in the current and three immediate prior three years.
Unused capital loss balances can be used to offset all other income on your final tax return.

Questions You Need To Ask:

Did I have any capital gains in the past three years?
Should I generate losses by selling assets to offset those gains and recoup some taxes paid?
What are the fees or other implications of selling?

Is Selling an Asset at a Loss a Wise Strategy? Choose the Best Answer:
	1.	No, selling an asset at a loss is never a wise strategy. Individuals must be long term, patient builders of wealth.
	2.	Maybe, when it is clear that the asset will not recover its value any time soon and other more compelling opportunities await.
	3.	Yes, you should always sell your assets at a loss to erase the memory of a bad or unfortunate situation.

Master Your Taxes Game

Future: Transitioning Into Retirement

Q8:	What is the most important process to consider when planning for retirement?

Things You Need To Know:

Retirement income planning is the process of integrating the investment portfolio, and the tax return with the retirement plan to fund lifestyle and preserve and transition assets.
Retirement income planning begins with the identification of personal visions and values which lead to a strategic plan for lifestyle needs to be funded.

Questions You Need To Ask:

Will taxes erode my income and capital?
How can tax planning increase my cash flow and decrease portfolio risk?

What is the most important process to consider when planning for retirement? Choose the Best Answer:
	1.	The best overall retirement plan links the retirement vision with optimal tax efficiency and then to portfolio design and product selection.
	2.	You are never too young to retire.
	3.	Retirement is out of reach for most people.

Master Your Taxes Game

Master The Process: Tackling The Return

Q9:	What can I do to "Master" my tax return?

Things You Need To Know:

You need to keep orderly records to exercise your legal right to arrange your family’s affairs within the framework of the law so as to pay the least tax possible.
Understanding the key components or "skeleton" of your tax return is the first stop to eliminating tax refunds so you can start using more of your gross earnings right away.

Questions You Need To Ask:

How will my net income affect the social benefits and tax credit’s I’m entitled to?
What has changed in my life over the past year?
Are there any new tax laws or provisions I should be aware of?

What can I do to "Master" my tax return? Choose the Best Answer:
	1.	Have only one job and keep your life simple so as to not over complicate your tax return.
	2.	Include "tax preparation" in your marriage vows and get your spouse to do it.
	3.	Commit to paying less tax, saving all pertinent receipts and use the information from your return to better plan your financial affairs.

Master Your Taxes Game

Avoiding Trouble: Your Relationship with CRA

Q10:	If I don’t have to pay taxes this year, do I need to file a tax return?

Things You Need To Know:

Your relationship with the Canada Revenue Agency will last a lifetime. Regardless of your income situation you should always file a return each year on time.
Filing a tax return does more: it will also record your entitlements to the Canada Pension Plan, Old Age Security, refundable tax credits and investment opportunities under the RRSP and TFSA.

Questions You Need To Ask:

What should I do if I haven’t filed all of my returns from prior years?
What should I do if I can’t retrieve all of my records for audit?
Under what circumstances can I request a cancellation of penalties and interest?

If I don’t have to pay taxes this year, do I need to file a tax return? Choose the Best Answer:
	1.	No, you should only file a return if you have earned income.
	2.	Maybe, because you can never be too sure if you owe taxes or not.
	3.	Yes, you should always file a tax return regardless of your income so as to reconcile your entitlements to various government programs and to make sure that taxes withheld at source were computed properly.

Master Your Taxes Game

You Too Can Do What the "Masters" Do!

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BASED ON THE BOOK

MASTER YOUR TAXES

By Evelyn Jacks

Understand the real impact of taxes on your income and capital
Learn to pay yourself first
Know how to split income with family members
Learn the basic principles of tax-free and tax efficient investing
Structure your affairs—legally—to beat the taxman

Available in your favourite bookstore or online at www.knowledgebureau.com