Mark Your Calendar: Critical Deadlines for May and June

Tax season never truly ends, it seems, as there are many more upcoming tax filing, investment planning and education milestones to discuss with your clients over the next six months. Check out our handy checklist below and then test yourself – what are the conversation openers you’ll use and with which clients? It’s your opportunity to shine with every member of the household:

Many frenzied parents find the "back to school" rush a financial burden.  Besides clothing, school supplies, transit passes and books, there is tuition for university students, a rising cost across the country.  Last week we covered the rules behind tax relief for tuition fees.  This week, consider the monthly credits earned by post-secondary students, which will turn into cash at tax time for students or their supporting parents, grandparents or spouses.  No receipts are necessary to benefit from this lucrative credit, but Form T2202A must be received from the university or designated educational institute. Advisors and clients should check the points below for a better understanding of qualifying criteria. EDUCATION AMOUNT Full Time Students. The credit for full-time students is $400 per month. A full-time education amount may be claimed for each whole or part month in the year that the student was enrolled in a qualifying educational program at a designated educational institution and the student: was enrolled full time, was enrolled part time and qualified for the disability amount, or was enrolled part time because of a mental or physical impairment. Qualifying educational programs (FULLTIME): a program that lasts at least 3 consecutive weeks and requires a minimum of 10 hours of instruction or work in the program each week (not including study time). Instruction or work includes lectures, practical training, and laboratory work. It also includes research time spent on a post-graduate thesis. After 2003, a program taken by the student in connection with the student's employment duties, even if that student receives income from that employment, will however qualify, provided only that the employer does not reimburse the tuition cost. Prior to 2004, the opposite was the case: such programs did not qualify, whether the employer reimbursed the student or not. Non-qualifying educational programs: Students who receive, from a person with whom he or she deals at arm's length, a grant, reimbursement, benefit, or allowance for that program do not qualify. However, receipt of a scholarship, fellowship, bursary, or prize received, or any benefit received under the Canada Student Loans Act, Canada Student Financial Assistance Act, or the Act respecting financial assistance for education expenses of the Province of Quebec does not disqualify the education program. Part Time Students. The credit is $120 per month. These may be claimed for each whole or part month in the year that the student was enrolled in a specified educational program at a designated educational institution. A specified educational program is a program that lasts at least 3 consecutive weeks and requires at least 12 hours of instruction each month. NOTE: KNOWLEDGE BUREAU SELF STUDY COURSES QUALIFY! Only one education amount may be claimed for each month ó the full-time amount or the part-time amount. Designated educational institutions include: Canadian universities, colleges, and other educational institutions providing courses at a post-secondary school level, Canadian educational institutions certified by the Minister of Human Resources Development as offering non-credit courses that develop or improve skills in an occupation, universities outside Canada where a Canadian student is enrolled in a course that lasts at least 13 consecutive weeks and leads to a degree, and universities, colleges, or other educational institutions in the United States that give courses at the post-secondary school level if the student is living in Canada (near the border) throughout the year and commutes to that institution. Age limitation for education credit. Students who are under 16 at the end of the year, may claim the education amount only for courses taken at the post-secondary level. Ineligible Amounts. Students may not claim the education amount if they: received a grant or were reimbursed for the cost of courses, other than by award money received, received a benefit as part of a program (such as free meals and lodging from a nursing school), received a salary or wages while taking a course related to their job, or received an allowance for a program such as a training allowance.   Join us in the coming weeks to hear about other FAMILY TAX PROVISIONS: Public Transit Passes Children's Fitness Credit Medical Expenses

The Federal Consumer Agency of Canada (FCAC), recently announced that a new web portal containing information regarding the management of money aimed at young Canadians is being launched. The Money Belt (located at themoneybelt.gc.ca) contains various interactive tools and modules that provide our youth with a fun and interesting method of learning about managing their money (or ours), now and into the future. FCAC Commissioner Ursual Menke states "in a world where today's youth quickly develop a keen interest in money, it is important that they acquire strong financial skills early so they can avoid making costly mistakes." The website features various tools and tips for young Canadians (the site is aimed at those in the 15 to 29 age group) to become financially savvy about credit cards and banking options. Here is an example of the information contained on the site: Always pay your credit card bills on time! You'll establish a history of good credit use, which can help you obtain loans and other credit products more easily in the future. If you have spare money, put it into an RRSP. It's never too early to start saving for retirement! Know your credit history. You can order your credit report by contacting one of the three credit reporting agencies in Canada ó Equifax, TransUnion or Northern Credit Bureaus Inc. Check your credit card receipts against your monthly statement. Mistakes do happen ó act immediately by notifying your card issuer if you spot an error or fraud. To save on ABM fees, avoid using white-label ABMs (operated by private companies) or an ABM belonging to a bank other than your own. As financial advisors are aware, it is never too early to start educating people around money and the issues that surround it. Check out The Money Belt website today for ideas for you, your clients and their children.

The boomer generation is pioneering ëwomen's retirement'. This is the first generation where many women will retire from long term careers with their own pensions, investment portfolios and their own views on what retirement should be. For more and more couples decision making about retirement considerations will become much more complex. For the first time advisors are now having to incorporate two retirements into the planning process, not just one. Are you ready to assist your clients to effectively balance the goals and desires of two individuals in a plan that works for both? If you don't have the specific knowledge skills and processes, all the planning in the world will not achieve what your clients desire. Men and women are now approaching retirement in different ways. One individual's retirement date will likely not coincide with the other's. Retirement may mean something different for each person. For one, it may mean slowing down, working part time, before leaving the work force completely. For the other partner, it may mean retiring at a later date than the other. Their wishes and concerns may be very different as well. The best way for the wealth advisor to work with these boomers is to adopt a strategic approach that begins with proactivity. It is important to put the framework in place for a discussion about lifestyle before building a wealth management and retirement income plan. The discussion must take place with both individuals in order to uncover and fully understand each person's priorities and to help them understand each other's wishes and concerns. A strategic approach provides the process and structure to listen deeply and only then take action affirmatively to get better results, simplify efforts and realize after-tax income your clients need to transition into economic inactivity in the ways they want. The Strategic Plan for Transitioning to Retirement, as taught in the Tax Efficient Retirement Income Planning course, a self study course offered by The Knowledge Bureau, provides a single or a multi-generational vision for the future based on: Values and definitive statements around productivity, participation, dependency and legacy Life and time milestones, involving the identification of stakeholders who will be part of the ìretirement teamî and precise definitions of needs and wants. An understanding of lifestyle funding capacity. Boomers want to know whether they can afford the retirement they envision while at the same time understanding how to continue to build and grow their capital throughout retirement. Only once this process has been completed can the wealth manager move to the next steps in building an action plan for tax efficient retirement income planning. Managing Real Wealth requires a focus on capital preservation by understanding client needs and wants in relation to their grasp of risk and return and the effects of interest rates and inflation on capital markets. Build your skills, learn the processes to develop as a Real Wealth Manager. Register for the Tax Efficient Retirement Income Planning course, one of six courses in the Retirement Income Specialist program, leading to the Master Financial Advisor designation.

PART 1: TUITION EDUCATION AND TEXT BOOK CREDITS In the next week or so, as the children head back to school, we should give some thought to how to claim all those tuition fees that are being paid out to various educational institutes. A review of the basic definitions for non-refundable credits and what qualifies for the tuition credit and education amounts is discussed below: DEFINITIONS IN BRIEF: Non-refundable tax credits available to post-secondary students and their supporting individuals include the following: Amounts for Tuition: Post-secondary students may claim the tuition amount under S.118.5 of the Income Tax Act. Amounts for Education Costs: A monthly education amount available under S.118.6 Amounts for Textbooks: A monthly credit for such costs is specified under S. 118.6(2.1). Transfers to Supporting Individuals: Students must claim the above amounts first on their return. If the student is not taxable, the claim for the tuition, textbook and education amounts may be transferred from a student to the supporting individual under S.118.81 or may be carried forward to future years for use by the student. TUITION FEES Students may claim the fees paid for courses taken in the tax year. To qualify, each tuition fee must be more than $100. Eligible fees include tuition fees: Fees paid for courses at a post-secondary school level paid to a university, college, or other educational institution in Canada, Fees paid to an educational institution in Canada certified by the Minister of Human Resources Development for courses (if the student was 16 or older in the year) to develop or improve skills in an occupation, Fees paid for courses at a post-secondary school level paid to a university, college, or other educational institution in the United States if the student lived in Canada near the border throughout the year and commuted to the school, and Fees paid if the student was in full-time attendance at a university outside Canada, for courses that were at least 13 consecutive weeks long, and that will lead to a degree. Eligible tuition fees include: admission fees, charges for the use of library or laboratory facilities, examination fees, application fees (but only if the student later enrolls in the institution), charges for a certificate, diploma, or degree, mandatory computer service fees, academic fees, the cost of any books that are included in the total fees for a correspondence course, and fees, such as athletic and health services fees, paid to a university, college, or other educational institution in addition to tuition for post-secondary courses, when such fees are required to be paid by all students. If not all students are required to pay them, then amounts eligible are limited to $250. Non-qualifying tuition fees include: Costs for secondary education at a private school or for private music, dance or other such lessons, do not qualify. students' association fees, medical care, transportation and parking, meals and lodging, goods of lasting value that you will keep, such as a computer, microscope, uniform, or an academic gown, and initiation or entrance fees to a professional organization Also, fees cannot be claimed if: they are paid or reimbursed by an employer, where the amount is not included in the employee's income, paid by a federal, provincial, or territorial job training program where the amount is not included in income, or the fees were paid (or are eligible to be paid) under a federal program to help athletes, where the payment or reimbursement has not been included in income. NOTE: KNOWLEDGE BUREAU SELF STUDY COURSES QUALIFY! Next time: Education Amounts COMING IN SEPTEMBER: OTHER FAMILY TAX PROVISIONS Public Transit Passes Children's Fitness Credit Medical Expenses

The CRA has issued a tax altert advising taxpayers that a letter has been circulating that is identified as coming from the CRA, when in reality it isn't.   The letter advises the taxpayer that there is insufficient information to process the individual's tax return, and requests personal information be provided on a form and sent back via fax or e-mail. The information requested includes bank account and passport information. The letter requesting this information is not from the CRA and the information should not be provided to the sender.   The CRA has notified the proper agencies of the fraudulent letter and advise all taxpayers to be vigilant about providing personal and confidential information to third parties.   Tax preparers will want to warn their clients about this scam so that private information isn't released to the wrong people. CRA has provided a copy of the letter that has been circulating, to view, click here.

Your clients have spoken ñ they want one highly qualified financial advisor who will help them build income and preserve wealth, throughout each phase of their life but especially as they transition to retirement. As the trusted advisor, you must ëget it' in terms of your client's needs and wishes before building a wealth management and retirement income plan. Then position yourself as the Quarterback of an inter-advisory team of specialists who assist you and your clients in making the appropriate decisions. Here's how Jim Ruta, Knowledge Bureau faculty member and speaker describes it: "Affluent clients expect excellence and the only way to deliver it is with an expert financial team. As you assemble this team, consider who your clients are, their attributes, and then pull in the required specialists that can solve their specific financial needs." Your most important role as the Quarterback will be to help your clients determine their priorities and then to call in the experts when their particular skills are required. Coordinate and manage the team. You are the relationship manager and are responsible for the quality of the relationship each member has with your client. It's critical to pick the ëright' individuals. Be at each meeting to ëtranslate' technical information into language understood by the client and to monitor team member performance. Don't leave anything to chance ñ after all, these are your clients! The inter-advisory team approach with you as the Quarterback is the most appropriate structure to provide competent "One Stop Shopping" for the 21st century client. You can either be part of that expert team or lead it or both Ö. the ultimate winner will be your clients who get much better advice, products and support. You'll provide exceptional value to the relationship, life will be simpler, more productive and you'll attract more business and referrals than ever before! The Knowledge Bureau can help you build the necessary skills to formulate and quarterback your inter-advisory team of experts. Transform your practice by registering in the fully accredited Retirement Income Specialist program, leading to the Master Financial Advisor designation. Recognizing your busy schedule, we will work with you to help you successfully complete the courses within timeframes that suit you.