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A thorough analysis of today’s financial news—delivered weekly to your inbox or via social media. As part of Knowledge Bureau’s interactive network, the Report covers current issues on the tax and financial services landscape and provides a wide range of professional benefits, including access to peer-to-peer blogs, opinion polls, online lessons, and vital industry information from Canada’s only multi-disciplinary financial educator.

This Week’s Edition of KBR:

July 2019 Poll

Should the capital gains inclusion rate be increased to 75% as some advocates are proposing?
Yes: 34 votes
No: 337 votes

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T4’s - Annual Reporting Requirements

The following forms and guides have just been released on the CRA website, ensure your payroll department is up-to-date and stays informed with the most current information available. RC18 Calculating Automobile Benefits T4127-APR Payroll Deductions Formulas for Computer Programs - 89th Edition - Effective April 1, 2009 T4001 Employers' Guide - Payroll Deductions and Remittances As the February 28th deadline for the issuance of annual T4's approaches, it is worthwhile to review the rules surrounding the production of the T4 slips. The final result of any payroll system is the production of the T4 Supplementary slips, and T4 Summary, which is required by every employer on an annual basis. A T4 Supplementary slip is prepared for each employee, and indicates the earnings of the employee, as well as the amounts of those deductions that CRA takes an interest in ñ such as CPP, EI and income tax deductions. The T4 Summary simply totals the information in all of the T4 Supplementary slips for the employer, and reconciles the total deductions taken for the year to the total amount remitted to the CRA. Any difference becomes a balance owing by the employer, and will probably be subject to penalties and interest, as if payroll has been properly handled all year, there should not be a balance owing on the T4 Summary. A link to these forms is provided on the Knowledge Net for this chapter. Regardless of the year end that the employer may have for financial statement purposes, the payroll has to be balanced and T4's have to be issued to employees, with copies provided to the CRA by February 28th of each year, for the previous calendar year. What is required information for completing T4 slips and the T4 summary? In order to complete the T4 slips and T4 summary for an employer, the bookkeeper will need to produce a summary for each employee of all amounts paid during the calendar year. The T4 is prepared on a cash basis, so it is not necessary to include pay periods ending during the year, only pay periods for which payment was made during the year. This summary should total the gross pay, all amounts deducted and the net pay for the year. Ensure that this summary cross balances by checking that total gross pay, less the total of all deductions is equal to total net pay. Also, ensure that the total amount remitted to the government agrees to the amount that should have been remitted based on total deductions.   Excerpted from Basic Bookkeeping for Business, one of the courses that comprise the DFA, Certified Bookkeeping Specialist designation program.   The Knowledge Bureau has updated its Advanced Payroll for Professional Bookkeepers course and now uses Simply 2009 software.  Click here to register.    

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CRA Tackles The Underground Economy

The Canada Revenue Agency is sponsoring a national video contest that will tackle the long standing issue of the underground economy. Titled The Underground Economy - Not Your Problem? the contest invites video submissions from Canadians on why the underground economy is bad for all of us.    The Minister of National Revenue, The Honourable Jean-Pierre Blackburn, had a meeting with students at Algonquin College in mid-February for a discussion regarding the underground economy and its impact on them both personally and professionally.  Many of the students who will be graduates of the college will become tradespeople and have significant potential for exposure to the underground economy.   The underground economy offers both an unfair and illegal advantage to those that operate within it by non-compliance with Canada's tax laws.  By exposing college students to this at an early stage, and particularly in a genre they are familiar with, YouTube videos, they are opening up their eyes to the impact it can have on aspects of the economy.   The CRA YouTube channel is being launched to provide all Canadians with an opportunity to present their ideas on how the underground economy can impact them, their businesses, and their own communities.  Submissions will be accepted until April 30, 2009.  For more information on the contest, link here.   

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Gourmet Retirement - Still Possible?

By Evelyn Jacks , PresidentThe Knowledge Bureau If happiness is a by-product of achievement, then planning for one of life's most important transitionsófrom economic activity in the workplace to ìeconomic inactivityî in retirementócan provide tremendous peace of mind. It can also result in the satisfaction of knowing your lifetime of work will not only fund your lifestyle, but provide an opportunity to transfer your life's workóboth wealth and wisdomófrom one generation to the next. This is, in large part, the key to opening the discussion around retirement income planning for many boomers. Often the soft issuesóthe difference between wants and needsóare the most difficult to approach in the discussion around finances in the last third of life. Busy, full lives are not often conducive to discussions about how to tap into the capital that's been accumulated or what we leave behind. That of course has always been the reason behind financial planning: to ensure there are enough resources available to meet personal needs and goalsóno matter what lifecycle you find yourself inóand then, if possible, to preserve and pass on a legacy. When you add tax efficiency to that planning mix (which very few do, by the way) you have the recipe for a ìgourmetî retirement. At the beginning of a retirement period clients are more concerned about the former issueówill I have enough to retire? However, as people move through this lifecycle towards the end of retirementódeathóthe legacy issue becomes more important. Legacy planning requires gazing beyond the grave, culminating with an understanding of how existing wealth will crystallize, on an after-tax basis for the use of survivors and more importantly, the family wealth stewards. Therefore a process that helps to identify the structure of stewardship for the transition of wealth from one generation to another is the starting point in a discussion about estate planning. Only then can the right roadmap be crafted for the completion of the journey from a life of work, to life's work, to a life's legacy. Simply put, there are three prerequisites for successful tax and financial planning that transitions underlying capital from a retirement income plan to an effective estate plan: A structure for identifying issues of concern A formal strategic plan for financial results A process for real wealth management: after tax, inflation-adjusted, cost-controlled Such a process should also deliver, as required, in regular and pre-defined time periods: Ongoing evaluation of the structure by the stewards of the plan Annual measurement and evaluation of net worth In short, for boomers, it's really not about retirement. . .it's all about transitioning from economic activity to a healthy and active lifestyle and an intact financial legacy. Tax and financial advisors need to have awareness of these issues; a deep understanding of the triggers that motivate boomers to come to the table for planning will enable the tax and financial advisor to quarterback the successful transition of both wealth and wisdom. The Knowledge Bureau is pleased to provide the Retirement Income Specialist Designation Program by self study which provides designated training in real wealth management focused on tax efficient retirement income planning.

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Make 25% RRIF Recontributions

Most of us are aware that on November 27, 2008 the Government proposed that the minimum RRIF required withdrawal be reduced by 25% for the 2008 tax year. The following should be noted with regard to the RRIF withdrawals and re-contribution amounts. Changes to RRIFs Payouts could reduce taxes. Registered retirement income funds or RRIFs and the requirement to withdraw certain minimums from them every year. This was of particular concern to many retirees given the financial crisis of late 2008. No one wanted to be required to realize losses because of the financial meltdown if they could afford to wait it out. The RRIF withdrawal rules do not provide for such an option. For example, if an individual would be required to make a $20,000 withdrawal under the current rules then that minimum amount would be reduced to $15,000 under the new rules. Taxpayers who have already withdrawn more than the reduced minimum amount would be allowed to re-contribute the excess amount (up to $5,000 in this example) back into the RRIF. The deadline for recontribution to RRIFs, Life Income Funds or other locked-in RRIFs is the later of March 1, 2009 and 30 days after the proposed rules receive Royal Assent (which has not occurred at the current date). Taxpayers making these recontributions will be allowed to claim a deduction for the amount recontributed on their 2008 returns. Note that RRIF annuitants who turned 71 in 2008 and who withdraw a minimum amount are not affected by the proposed changes as the 2008 minimum amount for these people is deemed to be nil after changes in the law in 2007. Therefore significant milestones for the month of March 2009 are the following: March 2 Age eligible taxpayers with unused RRSP contribution room may make contributions to that plan. March 15 Quarterly instalment payment due Later of March 1, 2009 or thirty days after legislation passes (which has not occurred yet) - Recontributions to an RRIF   For more tax tips, purchase a copy of Essential Tax Facts written by The Knowledge Bureau's President, Evelyn Jacks, to learn how to ace your 2008 tax return and save money all year long.

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CRM is more than just software ñ it drives survival of the fittest!

Does a recession increase or decrease an advisor's need to get, keep and grow his/her client base?   By Jim Graddon The answer, of course, is that these challenging economic times put a premium on all three of these important objectives. But what may not be as obvious is ìhow?î How do you get new clients? What do you do to retain your best clients? And what are some of the strategies for growing your existing client relationships? Now is the time to plan for the ìother side of the valleyî when business will be picking up (and you won't have the time to improve your infrastructure). You have a window now to make changes and invest in your own business to ensure you prosper in the face of adversity and fierce competition. Now is the time to leverage technology and automated processes to streamline operations and reduce the burden on people and salaries. The core technology of an advisor's business is a CRM, or customer relationship management software. An advisor-focused CRM delivers a combination of scheduling management, activity management, contact management, and sales/service workflow automation in a single integrated platform. Implementing a web-based advisor practice management system recruits the evolving resources of the Web for you and frees you forever from the limitations of office-bound systems. Today, many advisors access a myriad of proprietary websites and transaction systems. This can be compared to asking an airline pilot to constantly cross-reference a myriad of airline, weather, and airport systems while in flight. The result would be disastrous. Similarly, a financial advisor's ëcockpit' that lacks an integrated set of information and controls places the advisors' own ëpassengers' at a high level of risk. What should an advisor ëcockpit' ñ or CRM ñ address? At a minimum, a CRM should address these three critical areas: 1- Get Clients ∑ List management (including do not call list identification) ∑ Marketing campaigns (including automated follow-up scheduling) ∑ Mail merge & full integration with Microsoft Office ∑ Lead/opportunity tracking integrated with website leads ∑ Event management and registration tracking 2- Keep Clients ∑ Detailed client file including notes, documents, emails, policy and investments data ∑ Access data 7/24 wherever you are through web browser and/or wireless device ∑ Automated compliance audit trail and client review processes and scheduling ∑ Holistic client account aggregation and valuation of on book and off book data ∑ Automated triggers and alerts to drive client interaction and reviews ∑ Client data privacy and security meeting international security standard levels 3- Grow Clients ∑ Mine client data and automate cross-marketing campaigns The most efficient advisor CRM is one designed by and for Financial Advisors. Though this is the worst recession in memory for most advisors, the survivors will not freeze like a deer in the headlights. Instead, stay cool, keep your poise, and take the opportunity to bring your own practices and systems to the next level. Jim Graddon is the GM of the Canadian subsidiary for E-Z Data, creators of the web-based SmartOffice advisor platform. Jim has been a change catalyst for insurance and investment operations and technology for over three decades, with a focus on Canadian financial advisor technology since 1981. He can be reached at 866-568-9809,; or by referencing contact info at

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