I trust that you have had a good 2019 so far and are looking forward to the holidays as well as the New Year.

As the year is coming to a close, it is time to do a year-end review, if you have not yet begun, and start planning for the coming year.

A few important items to consider for this year-end:

• TFSA: the contribution limit is $6,000 for 2019 and 2020 as well. If you have not yet made any contributions in the past, you can contribute up to $63,500 by the end of 2019 or $69,500 in 2020 (some conditions applied).
  • 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). This withdrawn amount will be reinstated in your contribution room in 2020.
  • For Americans who reside in Canada, TFSA is not a tax-free account under IRS.
• RESP: you can receive the Canada Education Savings Grant (CESG) on the first $2,500 in contributions per year, or up to the first $5,000 in contributions, if sufficient carry forward room exists.
  • If you have not yet contributed the above amount, consider doing so before the year-end to maximize your annual matching.
  • If your child turned 15 this year, December 31^st 2019 is your last chance for opening an RESP account for that child & starting the first contribution.
• RDSP: you can get a maximum of $3,500 in matching grants in one year. A beneficiary’s RDSP can receive a grant on contributions made until December 31^st of the year in which the beneficiary turns 49.
• RRSP: you have until March 2^nd, 2020 to make a contribution toward 2019 tax year.
  • If you turned 71 in this year, December 31^st is the last day that you can contribute to your RRSPs. Depending on your situation, you might want to consider over-contribution by the end of December (some restrictions & penalties applied).
  • If you plan on withdrawing your RRSP under either LLP or HBP, consider delaying it to the new year to give yourself an extra year before the repayment required.
  • If you are making payments on your LLP or HBP, talk to us or your tax advisor to see if it is to your advantage to miss or to make the required payment for the year.
• 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.
  Depending on your situation, you might want to prepay certain medical expenses to claim the expenses for this tax year.
• Other Tax-Deductible Expenses: such as deductible accounting & legal fees, other professional fees, business-related expenses, child care expenses. Make sure to pay them by December 31^st.
• Moving? Choose your move date wisely, as tax rates vary between province to province. If you are to move to a lower tax province/territory, you might want to do so before the end of the year. Otherwise, consider delaying it until the new year.

I would like to remind you that we offer income tax return and bookkeeping services.
If you need a hand, or would like to discuss these and/or other tax planning strategies and how they affect your financial future, contact us 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.

Finance Minister Joe Oliver delivered his first Federal budget on April 21^st, 2015.
While you’ve probably seen plenty of media coverage, I thought you would appreciate an overview of how some of the budget items that relate to investments and taxes.

Increase TFSA contribution limit from $5,500 to $10,000
The proposed change is retroactive to January 1, 2015. For Canadians who are over age 18 and have not contributed since the TFSA’s creation in 2009, you now have $41,000 in contribution room.

Lower minimum RRIF withdrawals from 7.38% to 5.28%
The proposed changes to RRIF rules will mean seniors won’t have to withdraw as much money from their retirement savings. Required withdrawal rates still increase every year, but instead of topping out at 20% at age 94, the cap isn’t reached until age 95. The change is meant to reduce the risk of seniors outliving their savings. However, it could lead to a higher tax liability upon death if you leave too much money inside your RRIFs.

Introduce new Home Accessibility Tax Credit
Another budget item aimed at seniors and others who qualify for the Disability Tax Credit is a new Home Accessibility Tax Credit. This 15% non-refundable tax credit applies to up to $10,000 of renovations, such as wheelchair ramps, walk-in bathtubs and wheel-in showers.

Reduce Small Business Tax Rate from 11% to 9%
Small businesses will get to keep more of their earnings. This year’s budget proposes to reduce the small business tax rate to 9% by 2019 – or 2% over the next four years. The reduction generally applies to the first $500,000 of business income. There is a corresponding change to the Dividend Tax Credit from 11% to 9%, and gross-up factor from 18% to 15%, by 2019. Small business owners also will get a tax break if they sell their companies and donate the private company shares to charity. To be eligible, a sale must take place in 2017 or later.

Overall
With proper planning, people who are in higher tax brackets, own businesses or are nearing retirement will benefit from changes in this federal budget.

Thoughts
For those in lower tax brackets, TFSAs can become more advantageous than RRSPs. Those who are nearing retirement can take advantage of early RRIF withdrawal benefits and then move the money into a TFSA and keep it sheltered. Or, if you’ve already contributed the old $36,500 maximum, you could now move some non-registered investments into TFSAs.
In cases where large capital gains might apply, this might not be a strategy worth pursuing. We can talk about whether this strategy is a good idea when we meet.

I trust that you find these highlights useful. If you’d like to discuss these and other Federal budget initiatives and how they affect your financial plan, please don’t hesitate to contact me.

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.