David Christianson

  • Replacing TFSA money too early will cost you

    The tax-free savings account (TFSA) has become a very, very popular savings vehicle for Canadian taxpayers with over 10 million accounts open at the end of 2013. As you know, there is no tax deduction or immediate benefit for putting money into a TFSA. However, any investment income (interest, dividends and capital gains) earned within the TFSA is tax-free. This has saved taxpayers over $1 billion since 2009, says CRA.
  • Be on guard for bogus iTunes Store receipts

    Over the past while, I purchased some music from the Apple iTunes Store, as have millions of other people around the world. As you likely know, Apple sends you an email with your purchase receipt and confirmation. This is nice a reminder of what you purchased and the amount that will show up on your credit card.
  • Want to save cash on gas? Here is what you should do

    I broke my record this week. That's cause for celebration, on many fronts. What record? The number of minutes I was able to glide with my foot completely off the accelerator on my morning drive to work. Lexie and I glided almost five minutes out of 14, using virtually no gas, and travelled another three minutes with a very light foot, just maintaining speed.
  • Some rare good news from CRA

    In this summer of rain and floods, it was great to get some good news for a change from our friends at the Canada Revenue Agency. Or at least limited good news. This is in the form of a partial simplification of form T1135, Foreign Income Verification Statement, which had unfortunately become very complicated and unwieldy due to changes made in 2013.
  • Interesting to watch as securities world evolves

    This week, we saw federal Finance Minister Joe Oliver announce he is resurrecting Jim Flaherty's initiative to develop a single securities regulator in Canada. Currently, there are 13 securities commissions across the provinces and territories. Issuers of stocks and other investment vehicles needing to raise capital to make the economy grow must therefore have approval from up to 13 entities to legally market their wares everywhere in Canada.
  • Halftime report on markets

    It seems there are always a lot of misconceptions about stock-market performance, its connection with the economy and the general health of the markets. Just last week I heard a couple of people mention all markets were "not doing well." Let's correct that misconception. The fact is 2014 has been a pretty good year so far for the stock and bond markets and not a bad one for the Canadian dollar.
  • New regulations should assist consumers

    On July 15, Phase two of a new investment regulatory framework takes effect. For some investment advisers and consumers, this may mean a big change in their relationship. For others, it may just be business as usual. The initiatives are called CRM, for Client Relationship Model, and Point of Sale (POS) disclosure. The regulatory changes have been developed by the Canadian Securities Authorities (known as the CSA), and will generally be supervised by the Mutual Fund Dealers Association (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC).
  • Sacrifice now; live better later

    We all know more university and college students are graduating with large amounts of debt. They borrow money to pay rising tuition and other education costs and just to live while going to school. For many, summer is the one opportunity to earn some money, put something away for the fall and hopefully, reduce a bit of debt incurred during the year.
  • Snowbirds on deadline to clarify tax status

    Have you heard the one about the Perimeter Security and Economic Competitiveness Plan? Yeah, the one with the new Entry/Exit Initiative? Far from being the name of the very creative joke, it's a new agreement between the Canadian and American governments to share information on all entries and exits from both countries.
  • Barter: Don't forget taxman

    From time to time, it is my unwelcome role to be the bearer of bad news. I have had to do this in the past, with things such as reminding business people that golf green fees and memberships are not tax deductible, even when incurred to entertain customers. Today, my wet blanket extends to barter transactions. Bartering is arranging one of those wonderful agreements between people or organizations, to provide the service of one for those of another, rather than conducting the transaction with cash.
  • Barter: Don’t forget taxman

    FROM time to time, it is my unwelcome role to be the bearer of bad news. I have had to do this in the past, with things such as reminding business people that golf green fees and memberships are not tax deductible, even when incurred to entertain customers. Today, my wet blanket extends to barter transactions. Bartering is arranging one of those wonderful agreements between people or organizations, to provide the service of one for those of another, rather than conducting the transaction with cash.
  • Budget expands charitable giving

    The federal government budget of 2014 ended up having a potentially large effect on people's tax returns when they die and shortly afterwards. We have previously talked about the elimination of the preferential graduated income tax rates for testamentary trusts after Dec. 31, 2015. Estates will still be allowed the graduated tax rate for 36 months following the date of death, but then will be subject to the top tax rate on any investment income earned.
  • Philanthropy is about more than tax credits

    We usually talk about philanthropy and charitable donations in December, as the income tax deadline for the charitable-donation tax credit approaches. However, a few things have compelled me lately to provide a mid-year reminder that, although Dollars and Sense talks about money all year long, it's not the money that's important, it's what it can do for you, your family and your community.
  • Know how your investments are taxed

    A recent study shows less than half of Canadian taxpayers understand how their investments are taxed. While I know that this statistic is much too low when it comes to you well-informed Dollars and Sense readers, perhaps a quick review is still in order. Here are the basics for investment income earned on non-registered investment accounts. This is money outside of RRSP, RRIF, TFSA or other registered accounts.
  • In retirement, be the ant, not the grasshopper

    There's a simmering and occasionally vociferous debate about how to solve what some see as a looming retirement crisis in Canada. You see, a lot of us aging baby boomers have not saved enough money for retirement. As a result, many people will depend heavily on government programs, exacerbating the inevitable demographic tilt toward fewer workers trying to support more retirees.
  • Tax-preparing software turns a good time into a great time

    Just for fun, I redid some family tax returns last weekend in order to try out some different software packages. I know that's not everyone's idea of fun, but hey, it was a long weekend!
  • Even with no income, it's worth filing taxes

    If you have no income to report to the Canada Revenue Agency, or you have a small amount of income and no income tax owing, you are not required to file an income tax return. However, I strongly urge you to file a return anyway. Here's why.
  • A guide to trustee-beneficiary relationships

    A trust is a legal arrangement where trustees hold legal ownership to property on behalf of beneficiaries, who have the actual beneficial interest in the property. Trusts are used for a large number of purposes, and they can be extremely effective for asset protection, management for inexperienced or unreliable beneficiaries and tax planning.
  • Couple with differing incomes can use tax rules to advantage

    As you review your income tax return this coming month, you might notice you and your spouse have very different amounts of taxable income. If one of you is below $43,000 taxable and the other is above $87,000 taxable, then read on. In a situation like this, the lower-income spouse, we'll call him Bob, is paying a much lower rate on investment income. Bob's combined federal and provincial tax rate is zero to 28 per cent on interest income while only zero to 6.5 per cent on eligible dividends paid on any company shares he owns.
  • Primer on disability credit

    When a client received a cheque for $10,300 after our suggestion to apply for the disability tax credit (DTC), I was reminded it is time for us to review the rules and regulations governing the DTC application process. The second hint to me was an excellent article by Peter Manastyrski in the Senior Scope newspaper on the same topic. Peter is a DTC consultant with A Step Beyond, who helps with applications.
  • Tax refund burning a hole in your pocket? Put it to use

    Before I begin my lecture about making maximum use of your income tax refund, let me relate some trivia. These are courtesy of CRA, Statistics Canada, CBC and the Knowledge Bureau, from the 2012 tax year.
  • Don't forget your tax-time paperwork

    Last week, we reminded you of the penalties for filing your tax return late and also the significant penalties for omitting information slips or failing to disclose all sources of income. This includes capital gains on investments that were sold during the year. A number of people have asked me, "What is the difference between a T3, T5 and T5013 slip, and what about the other paper received from my investment company?"
  • Don't slip up when it comes to your tax slips

    As you can tell by the balmy weather, spring is almost here. (Yeah, right). Nevertheless, the time to prepare your tax return is upon us. Most Canadians use professional tax preparers for their returns, and this is a very good idea, especially if you have any complicated filing issues. However, I strongly encourage you to personally become more knowledgeable about your return, and how each line or filing decision (if you have any) affects your bottom line.
  • Column on managing money produces inspiring responses

    Wow, does Dollars and Sense ever have an amazing, caring and engaged readership! While I always believed that to be true, it was proven in spades. Two weeks ago, I suggested the best way we can change people's financial planning behaviours in a positive way is to apply positive peer pressure and social motivation.
  • Bad news on trust taxation

    Finance Minister Jim Flaherty delivered his 10th, and likely last, federal budget on Tuesday. In spite of the gold rush from our Olympic athletes threatening to drown out this news, he still got lots of attention. On the personal tax front, there are some tinkering improvements that affect limited numbers of people, which I will list later.

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