Do this before December 31…or be prepared to lose.
The recent changes to the tax rates and TFSAs require a quick assessment of your tax planning and action before the year-end!
Ensure your RRSP contribution is maxed.
Educators in the ‘middle-class’ (making between $45,282 and $90,563), will have their tax rate cut in the new year. Educators’ Certified Financial Planner professional Marian Ollila says that for this group, it will be essential to claim your RRSP contribution against your 2015 income.
In the higher tax bracket? What you need to know.
On the other hand, Marian says that “if you’re making more than $200,000, there are several things you should be talking to a financial advisor about.” These include:
- Delaying claiming your RRSP contribution until 2016, to offset the higher tax rate taking affect
- Maximizing your 2015 income by crystallizing any capital gains, and taking bonuses and deferred income before the change takes affect
- Reviewing your year-end dividend planning, ensuring you take dividends in 2015 rather than 2016
Other changes that could impact you.
Have a family? The federal government will be replacing the universal child care benefit program with one that will provide more generous benefits for poor families, and the amount reducing as family income rises.
Other changes to taxes include changes to trusts or charitable giving. If you would be impacted by these, see here https://www.bht.com/resources/income-tax-changes-january-1-2016-only-7-weeks-away for more information.
Now, more than ever, financial planning is critical.
In times of changes to tax structure or other government changes, it becomes even more important to ensure you talk to experts who understand the implications and their potential effect on your financial planning. Take advantage of the expertise available to you at Educators Financial Group today. Call and make an appointment with an Educators financial advisor at 1.800.263.9541.
Sources:
http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/TNF/Pages/Revisit-Your-2015-Year-End-Dividend-Planning-Now.aspx
http://www.cbc.ca/news/business/canada-taxes-changes-2016-rrsp-tfsa-1.3373880
