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.
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.
Taxable benefits are so important to the payroll cycle that CRA has written a separate payroll guide to explain them. Every payroll clerk should have this guide at hand to determine income reporting and statutory deduction withholding requirements on an ongoing basis. In all cases, where a taxable benefit arises the value of the benefit to be included in income is reduced by any payment the employee makes to the employer with respect to the benefit. There are four basic facts about taxable benefits to remember in processing a payroll: 1. Add their Value to Gross Pay. The taxable benefit must be added to the employee's cash compensation each pay period and normal statutory deductions must be withheld from the total amount. Remember that the value of the taxable benefit is reduced by any payment the employee made to compensate the employer for providing the benefit. 2. Annualized Tax Withholding is Possible. Where a non-cash benefit is very large so that withholding of income tax will cause undue hardship, the value of the benefit and the related withholdings can be spread over the remainder of the year. 3. CPP Deductions Required. If the benefit or allowance is taxable, it will also be pensionable. Therefore Canada Pension Plan (CPP) contributions will be required to withheld, as will income tax. 4. EI Deductions May Be Required. If the taxable benefit is paid in cash and relates to insurable employment, it is insurable. Employment Insurance (EI) premiums will therefore be required. However, if the employment is not insurable under the Employment Insurance Act, taxable benefits paid in cash are not insurable and are not subject to EI premiums. Finally, if the taxable benefit is a non-cash benefit, it is not insurable. In that case, the benefit does not attract EI premiums. The T4130 Guide available in EverGreen contains a chart which clearly identifies, in alphabetical order, the various types of taxable benefits and their source remittance. This table is also reproduced electronically on the CRA web site. Excerpted from Advanced Payroll for Professionals, one of the courses that comprise the Certified Bookkeeping Specialist program.