Monday, March 7, 2011
Save On Taxes
Well, it's Tax Season once again. We all get nervous. Deadlines come and when that last calculation is made, we get upset because we forgot to make contributions to save ourselves some money.
Thanks to John Scholl there is a way to achieve our retirement and other financial goals. John provides financial advise and articles for your information.
Read on and give me your comments:
Uh, oh – you somehow missed the March 1 deadline for RRSP contributions on your 2010 tax return. What to do now to save on taxes and help achieve your retirement and other financial goals? Easy – TFSA yourself. There’s no deadline with a Tax-Free Savings Account (TFSA), it’s a great place to invest your anticipated tax refund, and it’s a tremendously flexible way to achieve tax-free savings growth.
Here’s how it works:
- With TFSA eligible investments, you put your money in and you get your money out at any time for any purpose, tax-free. You can invest in your TFSA eligible investments any time you want, up to your maximum contribution level.
• The current maximum TFSA contribution is $5,000 per person, per year. This means that beginning on January 1, 2011, you were able to contribute another $5,000 to your
investments held within a TFSA in addition to any amounts carried forward from your 2010 limit and any withdrawals made in 2010
• You can make a gift to your spouse to make a TFSA contribution and transfer your TFSA assets to your spouse upon death.
• With investments held within a RRSP, you get a tax deduction for your contributions but all withdrawals are taxable. With TFSA - eligible investments, there is no tax deduction for your contributions but you do not pay tax on investment growth or withdrawals. All TFSA investment earnings are totally tax-free and will not trigger claw backs on federal tax credits or benefits programs such as the Guaranteed Income Supplement, Old Age Security Benefits, Age Credit, GST Tax Credit or Canada Child Tax Benefit.
• There are no age restrictions on a TFSA and there is no limit on how much contribution room you can carry forward – fill it up any time you want. TFSAs – can’t touch this!!! Well, actually you can and that’s what makes TFSAs such a flexible investment choice:
• Say you need $15,000 for a down payment on a vacation property. Just make a $15,000 tax-free withdrawal from your TFSA eligible investments.
• You can re-contribute the $15,000 after January 1 of the year following the withdrawal without affecting your other eligible contribution room.
• If you had taken that $15,000 out of your RRSP eligible investments, you would have needed to withdraw up to $27,800 to pay taxes (assuming a 46 per cent marginal rate) and come up with the $15,000 needed for your down payment – and you would have lost that RRSP contribution room.
Deadlines, schmedlines – a TFSA can work for you any time of the year. Ask your professional advisor about how to maximize your TFSA … and all your other investment strategies.
Well, any questions? Call a Financial Expert. Call John Scholl. His contact information is listed below.
John Scholl, CLU (Chartered Life Underwriter),CGA, B. Mathematics, Financial Consultant - Investors Group Financial Services Inc.
& Investors Group Insurances Services Inc.
Wealth Management & Financial Planning
Phone: (905) 450-2891 X529 Toll Free: 1 (866) 799-2223 x529 Cell (416) 731-3660 Fax: (905) 450-9747
If you would like to contact me first, call me, Betty Bartusevicius directly at 416 427 1875. I can help you make that home purchase a reality.