Newsletter
With 2015 complete, there’s not a lot of time left to optimize your investing and tax health. There are still a few actions you can take to maximize your wealth or at least minimize tax due in April:
Charitable donations
A big one is donating to charity. One thing to keep in mind is the First Time Donor’s Super Credit, which became available 2013 and will be around until 2017. Instead of the normal tax credit of 15% of donations under $200, the Super Credit boosts this to 40% for first-time donors. And between $200 and $1,000 the Super Credit boosts the tax credit from 29% to a whopping 54%.
If you don’t qualify for the Super Credit, investors who own stocks in non-registered accounts that instead of donating cash, they can donate securities that may have embedded capital gains in the last year. You can of course avoid tax by not converting paper gains to actual gains that would be incurred by selling; however, if you plan to give to charity anyway, consider transferring some winners to your favorite charity and thereby avoiding paying capital gains tax on the donated shares. Instead of the normal 50% inclusion rate, you’d have zero capital gain tax liability on the securities transferred, plus you will get a charitable donation tax credit.
RRSPs/RRIFs
Another great way to save tax is to invest in RRSPs. Fortunately for most people, Dec. 31 isn’t the deadline: for the 2015 tax year, the RRSP contribution deadline is March 2, 2016. The exception is those who turn 71 in 2015: if that’s you, you must convert your RRSP to a RRIF or life annuity before the year officially ends. Business owners should take note that to get the maximum 2015 RRSP contribution of $24,270 you’ll want to create earned income of $138,500 in 2015.
TFSAs
Of course, we would prefer NOT to withdraw money from a TFSA if at all possible and ideally recommend contributing another $5,500 early in 2015: preferably on Jan. 1 or Jan. 2 to maximize growth
For more tips and help with all your tax planning needs, please contact us
tbooffice@gmail.com or abehaber@msn.com
Telephone 416-402-7255 cell / 647-800-4205 Office
Tboffice.ca
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