Investors Shocked by Their Tax Bills?

You may have noticed more of your clients expressing dismay over the high amount of taxes owing this April 30.  The culprit could be the late year capital gains distributions declared  by fund companies in 2025, which can be a particular surprise for investors who bought their funds late in the year.  Their T slips will indicate an entire year’s distribution.  Worse, they won’t necessarily have the cash to pay the taxes – now or throughout the rest of the year.  Here’s what you need to know:

"Life is 10% what happens to you and 90% how you react to it." Charles R. Swindoll

Taxpayers who are subject to clawbacks of EI, OAS or personal amounts, have marginal tax rates that are significantly higher than other taxpayers at the same income levels.  When planning income levels in retirement, these inflated marginal tax rates need to be avoided whenever possible.

Global wealth has increased by 1.4%, but net worth per adult has remained relatively unchanged in 2016, according to a new Global Wealth Report, by the Credit Suisse Research Institute. The net worth per adult has risen 67% since 2000; however, this growth rate flattened out in the period 2008 to 2016.

The Auditor General for Canada has recently issued a report on CRA’s appeal process, focusing on whether CRA has been efficient in managing income tax objections.

Highly qualified tax advisors are in high demand, not only by their clients but by financial advisors who seek their services and advice.  But, especially if your clients are Boomers, it’s important to move past basic tax preparation knowledge to confidently address the complicated year-end tax planning issues they may face on their investments and properties.

Knowledge Bureau’s highly engaging Annual Personal Tax Bootcamp is coming soon, January 17-25, 2017, in six cities across Canada. Registrants are urged to reserve their spots early as seating is limited, and to take advantage of early-bird tuition reductions until January 10.