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tax tips (4)

Carbon Rebates #ForThePeople

The current manifesto for 2019 Carbon Tax redistribution. 

Plus some other thoughts from Mrs Tax 

https://www.spreaker.com/episode/16163500

https://www.spreaker.com/episode/16163503

Will add additional info in comments as sourced. 

Strategicly , I would like to see some requirement other than being a tax filer, and indirectly a voter to be eligible. Some sort of educational component. Perhaps a online course that teaches the basics of how to reduce our own personal carbon footprint.

Different levels gets you more of the credit or bonus credit if you click the box, I love this credit, Thank You Mr Trudeau.

For extra credit, the box that says , you got my vote, please redirect my rebate to your campaign.  You would then be eligible for an additional 75% tax credit on your redistributed carbon tax. 

I still like the find an easy Billion idea. Those Canadians that have left Canada to work abroad should all have to pay an annual tax. Fair is fair, they may not get a direct annual benefit from our Country, but we launched them. There should be a tribute for that. With almost 10% of Canadians living abroad, and a million immigrants projected need to fill vacancies in the work force, why not, let’s get a little return for our country’s investment in their beginnings. TLR

https://improvingfutures.ning.com/blog/how-to-find-a-billion-dollars

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Year-end planning for RRSPs and TFSAs

Year-end planning for RRSPs and TFSAs (December 2017)

"Wolters Kluwer's insider tips for year end planning, worth reviewing the little details that might apply to you" ~ TLR

For most Canadians, registered retirement savings plans (RRSPs) don’t become top of mind until near the end of February, as the annual contribution deadline approaches. When it comes to tax-free savings accounts (TFSAs), most Canadians are aware that there is no contribution deadline for such plans, so that contributions can be made at any time. Consequently, neither RRSPs nor TFSAs tend to be a priority when it comes to year-end tax planning.

Notwithstanding those facts, there are considerations which apply to both RRSPs and TFSAs in relation to the approach of the end of calendar year. Failing to take those considerations into account can mean the permanent loss of contribution room, a loss of flexibility when it comes to making withdrawals, or having to pay more tax than required when funds are withdrawn. Some of those considerations are outlined below.

When you need to make your RRSP contribution on or before December 31st

While most RRSP contributions, in order to be deducted on the return for 2017, can be made anytime up to and including March 1, 2018, there is one important exception to that rule.

Every Canadian who has an RRSP must collapse that plan by the end of the year in which he or she turns 71 years of age – usually by converting the RRSP into a registered retirement income fund (RRIF) or by purchasing an annuity. An individual who turns 71 during the year is still entitled to make a final RRSP contribution for that year, assuming that he or she has sufficient contribution room. However, in such cases, the 60-day window for contributions after December 31st is not available. Any RRSP contribution to be made by a person who turns 71 during the year must be made by December 31st of that year.

Make spousal RRSP contributions before December 31

Under Canadian tax rules, a taxpayer can make a contribution to a registered retirement savings plans (RRSP) in his or her spouse’s name and claim the deduction for the contribution on his or her own return. When the funds are withdrawn by the spouse, the amounts are taxed as the spouse’s income, at a (presumably) lower tax rate. However, the benefit of having withdrawals taxed in the hands of the spouse is available only where the withdrawal takes place no sooner than the end of the second calendar year following the year in which the contribution is made. Therefore, where a contribution to a spousal RRSP is made in December of 2017, the contributor can claim a deduction for that contribution on his or her return for 2017. The spouse can then withdraw that amount as early as January 1, 2020 and have it taxed in his or her own hands. If the contribution isn’t made until January or February of 2018, the contributor can still claim a deduction for it on the 2017 tax return, but the amount won’t be eligible to be taxed in the spouse’s hands on withdrawal until January 1, 2021. It’s an especially important consideration for couples who are approaching retirement who may plan on withdrawing funds in the relatively new future. Even where that’s not the situation, making the contribution before the end of the calendar year will ensure maximum flexibility should an unanticipated withdrawal become necessary.

Accelerate any planned TFSA withdrawals into 2017

Each Canadian aged 18 and over can make an annual contribution to a Tax-Free Savings Account (TFSA) – the maximum contribution for 2017 is $5,500. As well, where an amount previously contributed to a TFSA is withdrawn from the plan, that withdrawn amount can be re-contributed, but not until the year following the year of withdrawal.

Consequently, it makes sense, where a TFSA withdrawal is planned within the next few months, perhaps to pay for a winter vacation or to make an RRSP contribution, to make that withdrawal before the end of the calendar year. A taxpayer who withdraws funds from his or her TFSA before December 31st, 2017 will have the amount withdrawn added to his or her TFSA contribution limit for 2018, which means it can be re-contributed as early as January 1, 2018. If the same taxpayer waits until January of 2018 to make the withdrawal, he or she won’t be eligible to replace the funds withdrawn until 2019.


The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
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Spousal RSPs on Marriage breakdown

Marriage breakdown and removal of spousal designation 

See my summary at the bottom, read the content and context  first, it can be a little confusing, there is two issues here  ++++

https://www.sunlife.ca/slfas/Investments/Sun+Guaranteed+Investment+AA+GIC/Removal+of+spousal+designation++Superflex?vgnLocale=en_CA

 

There must be no spousal or common-law partner contributions to any of the annuitant's RRSPs (i.e., RRSPs held with any issuer) for the year of the request and the two previous years. The annuitant's written statement should certify that the spouse, common-law partner, former spouse, or former common-law partner did not contribute to any of the annuitant's RRSPs in the calendar year of the request nor in the two immediately preceding calendar years. No withdrawals,   There must be no withdrawals from the spousal or common-law partner RRSP during the year of the request

 

http://www.jamiegolombek.com/articledetail.php?article_id=555

 

Unfortunately, due to the Canada Revenue Agency's concerns regarding the "spousal RRSP attribution rule," this isn't as easy as you think. The special anti-avoidance rule is
designed to prevent short-term income splitting. Simply put, if the annuitant spouse withdraws any funds from a spousal RRSP within three calendar years of any contribution being made, the withdrawal will be attributed back to the contributing spouse and taxed in his or her hands.

Luckily, this rule does not apply if the spouses or partners are living separate and apart at the time of withdrawal by reason of the breakdown of their marriage or common-law partnership.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/making-withdrawals/withdrawing-spousal-common-law-partner-rrsps.html

Exceptions

The rule that requires you, the contributor, to include certain amounts from spousal or common-law partner RRSPs, spousal or common-law partner RRIFs or, a spouse’s account under an SPP as income does not apply to the following situations:

  • At the time of payment, or when we consider the payment to have been received, you and your spouse or common-law partner were living separate and apart because of the breakdown of your relationship.
  • At the time of payment, or when we consider the payment to have been received, you or your spouse or common-law partner were non-residents of Canada.
  • The amount is a commutation payment that is transferred directly for your spouse or common-law partner to another RRSP, a RRIF or an SPP or to an issuer to buy an eligible annuity that cannot be commuted for at least three years.
  • The contributor dies in the year of payment or the year we consider the payment to have been received.
  • We consider the deceased annuitant to have received the amount because of death.

In any such case, the annuitant spouse or common-law partner includes the payment in income for the year he or she receives it or is considered to have received it.

In all cases, the tax deducted has to be claimed by the individual to whom the slip is issued. In most cases, the information slip issued for the withdrawal will be in the name of the annuitant. However, report the income according to the calculations completed in Parts 1 and 2 of Form T2205.

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Ok, so , don't withdrawal from a spousal until after separation has been well documented, to avoid the taxes being taxed on the contributors return. You may have to maintain the spousal rsp designation for up to 3 years after the last contribution, but that does not prevent withdrawals and the income from being taxed in the spouses hand that has the account after separation

 

 

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