News & Views

It is that time of the year again:  the RRSP season and the income tax return season. I would like to remind you that we do offer income tax preparation as well as bookkeeping services for individuals and self-employed entrepreneurs.
Please contact me directly to schedule an appointment.

A few important items to keep in mind for the 2016 tax year:

• RRSP Contribution Deadline: March 1^st 2017 for the 2016 tax year. Yes, it is just around the corner. Why wait until the deadline? Do it as early as you possibly can.
  RRSP Maximum Contribution Limit is $25,370 for 2016 tax year, or 18% of your earned income, whichever is lower, plus any unused contribution room from previous years.
• T4/T4A/T5 Return Deadline: February 28^th 2017, for the 2016 tax year.
• Income Tax Return Deadline: May 1^st 2017 for most taxpayers. If you or your spouse carried on a business in 2016, you have until June 15^th 2017 to file your return. However, your balance, if any, still has to be paid no later than May 1^st 2017 to avoid interest and penalty.
  • If you are expecting a refund, file your return now and get back your money as soon as possible.
  • If you are expected to pay, send in your return before May 1^st 2017 even if you can’t pay your balance, to avoid late-filing penalty.
• Business GST/HST Return Deadline: June 15^th 2017, for most GST/HST registrants, if you have an annual reporting period. However, your balance, if any, has to be paid no later than May 1^st
• Got married/divorced in 2016? Had a baby in 2016? Change in these statuses can impact your taxes and benefits. Make sure to mention these changes to your income tax professional.
• Home Accessibility Credit: You can claim up to $10,000 of eligible expenses. If an eligible expense also qualified as a medical expense, you can claim both the medical expenses tax credit and the home accessibility credit for that expense.
• Bought your home in 2016? For qualified first time home buyers or eligible persons with disabilities, you can claim the home buyers’ amount of $5,000 for the purchase of a qualifying home. You may also be eligible for a new housing rebate for some of the GST/HST paid.
• Sold a house in 2016? Starting 2016, you have to report the sale on your tax return in the year you sold it. However, if it is your principal residence, you usually do not have to pay any capital gain tax.
• Moved in 2016? You may be eligible to claim moving expense if your new home is at least 40 kilometers (by the shortest usual public route) closer to your new work/school.

Most companies and institutions have started sending out the receipts and T-slips.
I suggest you start a brand-new folder for those and keep them all in there as they arrive. This will make it much easier when the time comes for filing your income tax returns.

Remember to always “Dream It. Plan It. Live It.”
I am here to help you on your journey. Do not hesitate to reach out if I can be of any assistance.

I trust that you have had a good year so far and an amazing summer. I spent a good part of my free time visiting Asia, relaxing in the Caribbean and trekking around Newfoundland. I even spent a couple of days in Paradise. Yes, the town of Paradise, in Newfoundland, that is.
Pictures are to follow soon on my Facebook page HelenaCFP. While you are there, take a look at our “Retire Right” page and “like” it.

The end of the third quarter is fast approaching, it is time to do a mid-year review, if you have not yet done so.

A few important items to consider for all taxpayers:

• Eligible Tax Benefits: Did you receive those tax benefits that you qualified for such as GST/HST refund, Ontario Trillium benefit and Child Tax benefit. If you filed your tax return on time, you should have received those payments already.
• Medical Expenses: This has been one of the most under-claimed areas. The 12-month rule allows you to claim any 12-month period ending in the tax year for yourself, your spouse and your eligible dependents.
  Plan payments for your major medical expenses to take advantage of this rule. Most of the time, the lower-income spouse should make the claim, with some exceptions.
• TFSA Withdrawals: This has been one of the most misunderstood areas. Any withdrawals made from your TFSA in the year will only be added back to your TFSA contribution room at the beginning of the following year.
  If you are going to withdraw from your TFSA soon, it is best to do it before the end of the year (instead of the beginning of next year.)
• Investment Portfolios: when was the last time you reviewed your investment portfolios with your advisors? You work hard for your money. Make sure it works just as hard for you.

A few important items to consider for self-employed individuals:
Being your own boss comes with few extra tasks such as:

• Bookkeeping: gather up and organize your receipts, invoices, motor vehicle expenses, business use-of-home expenses, etc.
  Whether you use a bookkeeping service or do it yourself, do NOT wait until the end of the year. Do some diligence now and save yourself some headaches at tax time. Better yet, get it done quarterly.
  We do offer income tax return and bookkeeping services. Reach out if you need a hand.
• Business Income: by now, you should be able to make an estimate of your income for the year. Are you on track with your business goals? And what lessons can you learn from this?
• Tax Liabilities: now that you’ve done the first two steps, you can estimate your tax payable amount. Did you put aside some money for those payments?
  Don’t forget the GST/HST payment if you are a GST/HST registrant.
• Depreciable Asset Purchases: the CRA has a first-year rule on most of depreciable properties. That means you can’t deduct the full cost of depreciable property for the year in which you acquired the property. You can reduce your “loss” portion by planning your purchases near the end of your fiscal year.

I trust that you find these highlights useful.
If you need a hand, or simply would like to discuss these and/or other tax planning strategies and how they affect your financial plan, contact me directly.

Remember to always “Dream It. Plan It. Live It.”

I am here to help you on your journey. Reach out if I can be of any assistance.

As we are in the midst of the RRSP season and the beginning of the income tax return season, I would like to remind you that we do offer income tax preparation services for individuals and businesses. Please contact me directly to schedule an appointment.

A few important items to keep in mind for the 2015 tax year:

• RRSP Contribution Deadline: February 29^th 2016 for 2015 tax year. Yes, it is just around the corner. Why wait until the deadline? Do it as early as you possibly can.
  RRSP Maximum Contribution Limit is $24,930 for 2015 tax year, or 18% of your earned income, whichever is lower, plus any unused contribution room from previous years.
• Income Tax Return Deadline: May 2^nd 2016 for most taxpayers. If you or your spouse carried on a business in 2015, you have until June 15^th 2016 to file your return. However, your balance, if any, still has to be paid no later than May 2^nd 2016 to avoid interest and penalty.
  • If you are expecting a refund, file your return now and get back your money as soon as possible.
  • If you are expected to pay, send in your return before May 2^nd, even if you can’t pay your balance, to avoid late-filing penalty.
• T4/T4A Return Deadline: February 29^th 2016, for 2015.
• Business GST/HST Return Deadline: June 15^th 2016, for most GST/HST registrants, if you have an annual reporting period. However, your balance, if any, has to be paid no later than May 2^nd 2016.
• Bought your home in 2015? If you are a first-time home buyer, you may be able to claim an amount of $5,000 for the purchase of a qualifying home in 2015.
• Got married/divorced in 2015? Your marital status impacts your taxes. Make sure to mention these changes to your income tax professional.
• Home Accessibility Credit: Introduced in the 2015 federal budget to help seniors, disabled persons and their families. However, this credit is only in effect for 2016. So if you are planning any eligible renovations, this year may be the year to do so.

Most companies and institutions have started sending out the receipts and T-slips. May I suggest you start a brand-new folder for those and keep them all in there as they arrive. This will make it much easier when the time comes for filing your income tax returns.

As we enter into 2016, global capital markets have been volatile, continuing the challenging conditions that characterized much of last year. Although the global economy is still slowly growing, many bond and equity markets are being affected by a combination of factors, including several sharp sell-offs in the Chinese stock market, sinking commodity prices, soft economic data and uncertainty surrounding the U.S. Federal Reserve’s decision to raise interest rates for the first time since the financial crisis.

In 2015, the unstable conditions led to mixed results for equity markets. The MSCI World Index registered a modest 0.3% loss for 2015 in U.S. dollar terms, including dividends. The Canadian dollar’s weakness against the U.S. dollar and other global currencies, however, resulted in a gain of 18.9% for the index in Canadian dollar terms. This performance reflects stronger results for markets in the U.S. and Japan and mixed results in Europe and other Asian countries. Similarly, the benchmark S&P 500 Index in the U.S. added 1.0% (including dividends) in U.S. currency, a return that was magnified to 20.5% when expressed in Canadian dollars. The well-diversified U.S. market continues to benefit from the country’s economic recovery, with improving housing and employment data underpinning business confidence.

Canada’s commodity-heavy S&P/TSX Composite Index, meanwhile, was once again weighed down in 2015 by weakening prices for oil, metals and other commodities and lagged most other developed markets. As the price of oil fell toward US$35 per barrel, the benchmark index headed lower to finish the year with a total return of -8.3%. Equity index results for the commodity-sensitive emerging markets and Latin America were also negative.

Given the slow pace of economic activity in most parts of the world, most central banks are keeping monetary policy highly accommodative to growth.The U.S. Federal Reserve’s announcement on December 16 that it would raise short-term interest rates by 0.25%, however, was an important acknowledgement that the U.S. economy has substantially recovered from the financial crisis of 2008. Nevertheless, government bond yields remained muted and the FTSE TMX Canada Universe Bond Index, a measure of government and investment-grade corporate bonds, added 1.1% in the fourth quarter of 2015 for a gain of 3.5% for the year. The U.S. high-yield bond market experienced a stronger reaction to market conditions, losing 4.6% in 2015 in U.S. dollars.

Looking ahead, there are many reasons to be both cautious and optimistic about the strength of the global economy and the direction of capital markets. Two of the world’s largest economies, the U.S. and China, continue to expand and inflation remains low in most economies. The Fed has reassured investors that further rate increases will occur gradually, to avoid stalling the global economy’s muted growth. Elsewhere, central banks in Europe, China and Japan and Canada have taken steps to keep interest rates low and to stimulate their economies. While the fundamental economic conditions remain supportive for many global businesses, some experts warn that these divergent policies are likely to result in further volatility for investment markets over the coming months.

Although the headlines about volatile markets can be unsettling, it is important to keep the big picture in mind. Equity markets, in particular, are often subject to temporary ups and downs, but over the longer term, the general direction has been up. I continue to believe that a well-diversified portfolio that reflects your financial goals and tolerance for risk can help to smooth those peaks and valleys, as well as provide an excellent opportunity for building wealth over time.