News Archives - Page 17 of 28

Alberta accounted for 97% of federal income tax decline during recession’s height

It’s going to take quite a while to determine exactly why the Federal income tax revenue fell by about $5 billion in 2016. According to the Globe & Mail high-income earners paid $4.6 billion less in taxes in 2016 despite a higher tax rate. One thing that stood out was that Albertans accounted for 93 percent of the decline among those in the top income brackets. It was a similar in lower tax brackets as well.

Why you need to understand risk and uncertainty when planning for retirement

When retirement planning, you need to consider that it is not a one size fits all plan, and you often have to make adjustments due to risks. Typically, financial planning will take into consideration investment returns, inflation and retiree spending and assumes a lifespan of 90. However, risks are not limited to this list, and can also include jobs, divorce, disability or death. For better retirement planning, it is advisable not to take a set it and forget it attitude and instead review your plan more often and make adjustments along the way.

“The ‘Risk’ of Ignoring Risks in Retirement Financial Planning” may be of interest to retirees, those approaching retirement, and the advisors who advise them both.”

When the CRA’s bullying came back to bite it: Offshore tax audit results in $5 million in damages

The Canada Revenue Agency (CRA) was accused of being overly aggressive in it’s audit and assessment methods of SLT, but the agency itself had to pay up after an off shore audit went wrong and the taxpayers involved sued for damages. Shareholders of a company called SLT were relentlessly assessed over a period of several years only to have the CRA back off when the agency realized the assessments would not lead anywhere. The taxpayers sued and were awarded close to five million for lost interest and legal fees.

“The CRA’s conduct in this matter is troubling. More troubling are the facts that ordinary Canadians without deep pockets are often at the mercy of the CRA and that, had the case been governed by the laws of any other province or territory instead of Quebec civil law, the taxpayers might not have prevailed.”

This retirement advice should be retired

We’ve all been told how much to save for retirement. However, setting such a high goal, especially for those in their 20s or 30s, can leave many people so frustrated by what they’re told to save that they completely give up on savings and investing altogether. Although some guidelines should be followed, it should be reasonable as even saving a little will help. Around your mid-40s to early 50s is the time people should pay attention to saving guidelines to ensure you can retire with the lifestyle you want.

“Savings guidelines can help you see if you’re in good shape or need to save more. Ultimately, though, we need people to save consistently for retirement. “

If you sell real estate, expect the taxman to take a close look in continued CRA crackdown

The CRA has recently announced that the agency plans to be more proactive when it comes to real estate sales. Despite the need to report real estate sales (even on your principal residence which is except from tax), not every Canadian is reporting these sales on their tax returns. Over the last three years, over 30,000 files have been reviewed by CRA auditors who discovered nearly $600 million in additional taxes and resulted in over $43 million in penalties. In particular, pre-construction assignment sales are especially on the agency’s radar. If you plan on selling property, it’s best to report any sales and pay what you owe upfront as you can accumulate massive penalties from non-payment. The agency has and will examine more of these transactions every year.

Make robots pay taxes? Documents detail ideas to adapt to changing labour force – iPolitics.ca

Due to technology, the modern workforce is ever changing. Today in the “gig” economy, there is more part-time and short-term contract work, in addition to automation replacing human workers. These changes in the workforce would mean fewer taxes paid into the country’s federal finances. To counteract reduced revenues, the government is considering a proposal to place a tax on technology that is used to replace human workers, as well as other solutions such as a guaranteed minimum income for Canadians and rejigging labour rules to help workers.

“What the Liberals and other governments around the world are trying to respond to is increasing automation, the unbundling of work that can be done online by anyone, anywhere in the world, and more short-term jobs that are the hallmark of the “gig” economy.”

What CPP reforms mean for Canadian seniors

Two years ago, the government expanded the CPP. It was a much-needed restructure to a system that has had no revisions in fifty years. Here are some of the changes. It will give equity to all seniors, but due to the complex tax structure in Canada, the study found 42 percent of the new CPP benefits will be lost by low-income earners and high-income earners face due to higher taxes and losing other benefits. It will, however, increase the percentage of seniors who are able to receive enough money to retire comfortably. Some feel the changes are not enough, but these changes are still an improvement.

What investors should know before buying into an IPO

Investing in an IPO can be lucrative, but it’s not without its risks. Any investor looking to put their money into a new company needs to be prepared to read the prospectus and consider some key factors before making a decision. One factor is to assess whether the company has the capacity to keep growing. It’s also important to understand why the company is going public and what the founders are willing to give in return for your investment. Look at the risks, determine if the numbers are reasonable and do your own research.

Big credit card firms agree to cut fees they charge merchants

Ottawa has reached five-year deals with Visa, MasterCard and American Express to cut fees by about 10 basis points. In 2020, fees that are collected from businesses will be reduced. Some people had hoped that Ottawa would lower the rate a little more, given that this is only a very small step considering what could have been done. The Canadian Federation of Independent Business called the changes positive. When governments regulate rates, banks can always find other fees to increase to compensate for their lost revenue, so there may be some unexpected consequences.

How charitable remainder trusts let you provide for heirs while doing some good

Your financial legacy can be set up to help provide an income for your heirs as well as a donation to a charity at the same time. You can do this by setting up a Charitable Remainder Trust (CRT). Your heir receives an income from the trust and has a “life interest” in the trust. The charity of your choice has a “remainder interest” (or “residual interest”) upon the death of your heir. One of the advantages of setting it up this way is that your estate can receive a donation tax credit on your final tax return when done correctly.