Tax Tip: The More Obscure Medical Expenses
Are you claiming all the medical expenses you or your clients might be entitled to?Incentives for Apprentices
As an incentive to encourage young people to enrol in apprenticeship training programs, the federal government provides the Apprenticeship Incentive Grant which provides $1,000 cash per year to registered apprentices who have completed their first or second year in a designated Red Seal trade program, on or after January 1, 2007. This grant, which was intended to offset the cost of tuition, travel and tools is considered to be employment income and will be reported on at T4 slip for the year in which the grant is received.
The province of British Columbia provides additional incentives through the income tax return. The BC Training Tax Credit - for Apprentices and Employers provides refundable tax credits for both the apprentices and their employers. For apprentices in non-Red Seal programs the credit is $1,000 for completion of level 1 and 2 of the program, $2,000 for completion of level 3 and $2,500 for completion of level 4 or higher. Enhanced grants are available for First Nations individuals and persons with disabilities. For apprentices in Red Seal programs, no grant is available for completion of the first two levels, but grants for completion of levels 3 and above are the same as for non-Red Seal programs.
Andrew and His Team Reach Base Camp!
Andrew Brash Update
As last week's Breaking Investment News was making it's way to you, Andrew Brash, Knowledge Bureau Faculty member was arriving at base camp on the Nepal side of Mt. Everest.
Unlike the Tibetan side, the journey to base camp in Nepal is largely done on foot.
ìI had lots of time to think today, about what happened in 2006 (I could even see the last bit of the North Ridge for a moment), about the political events that have brought me and others here, and about home and what I am putting people through back there. However, there were some moments today where I did feel truly happy and excited to be here. The mountains here have to be seen in person to be truly appreciated.î Andrew writes in his online expedition dispatch.
The Nepal base camp is 5300m above sea level and only the beginning of the challenges facing Andrew and his team. We will continue to feature an ongoing update on his climb as part of Breaking Tax and Investment News or you can track his progress by visiting his website http://www.andrewbrash.com/ for live updates from the expedition.
Stay tuned for updates!
Prescribed Drought Regions for 2007
Did you know that a farmer carrying on business in a prescribed drought region may defer a portion of income earned in the year from sales of breeding animals? The amount of deferral depends on the percentage of reduction of the breeding herd:
if the breeding herd is reduced by at least 15%, but less than 30%, then 30% of the sales proceeds (net of purchases) may be deducted in the year of sale;
if the breeding herd is reduced by 30% or more, then 90% of the net sales proceeds may be deducted in the year of sale.
The deferred amount must be included in income by the first taxation year after the farm is no longer in a prescribed drought region.
The current prescribed drought regions are announced annually by Agriculture and Agri-Food Canada, after the calendar year end. For 2007, the list of designated regions include parts of southern British Columbia, southern Alberta, southwest Saskatchewan and Ontario. Click
Second Quarter Rates
Old Age Security Benefit Rates Unchanged
The rates for Old Age Security pension and Guaranteed Income Supplement payments remain unchanged for another quarter. The rates for the fourth quarter of 2007 and the first two quarters of 2008 are:
Benefit
4th Quarter 20071st Quarter 20082nd Quarter 2008
Old Age Security
$502.31
GIS - Single pensioner
$634.02
GIS - Married to Non-Pensioner
$634.02
GIS - Married to a Pensioner
$418.68
GIS - Married to a Recipient of the Allowance
$418.68
Allowance: Regular
$921.00
Allowance: Widowed
$1,020.91
Prescribed Interest Rates Remain Unchanged, Too.
Prescribed interest rates for the second quarter will remain the same as the first quarter of 2008.
2007 Quarter
2008 Quarter
Rates Applicable to:
1
2
3
4
1
2
3
4
Overdue Taxes
9%
9%
9%
9%
8%
8%
CPP/EI Premiums
9%
9%
9%
9%
8%
8%
Tax Overpayments
7%
7%
7%
7%
6%
6%
Taxable Benefits, Low or No Interest Loans
5%
5%
5%
5%
4%
4%
Andrew’s Quest for the Summit Continues
Andrew Brash Update
Andrew Brash, Knowledge Bureau Faculty member may be on one of the 20 plus teams in possession of their climbing permit from the Nepal Ministry of Tourism.
According to MountEverest.net, more than 20 teams have received climbing permits for Everest, with about 10 plus teams still in the process.
The permit contains more specifications than normal. One of the new requirement is: ìAll the news regarding the expedition must be conveyed to the Ministry of Tourism & Civil Aviation first of all, and only then it can be sent to others.î This may be one of the reasons why updates from Andrew have been slow to come.
This climbing season is expected to have less climbers than usual ñ about 270 plus locals. We are still monitoring the situation and keeping our fingers crossed. We will continue to feature an ongoing update on his climb as part of Breaking Tax and Investment News or you can track his progress by visiting his website http://www.andrewbrash.com/ for live updates from the expedition.
Stay tuned for updates!
“Do I Have Enough to Retire?” Expert Answers Are Possible
With a flood of baby boomers approaching retirement, cash flow planning is an important issue, which is not surprising. However, what is interesting, is this appears to be more of a problem for the affluent, than for blue collar workers.
A recent Statistics Canada report (Income Security in Retirement Among the Working Population ñ published March 10, 2008) indicates at age 75, most retirees had a family income of 80% of their earnings at 55, which is good news for the affluent; more sobering news for those who are not prepared for life after work. However, adjustment to a lower income after work is often more difficult for those used to earning a lot of money, it appears.
The lower the income, the less change was felt in lifestyle during retirement, according to the report. In fact, many of Canada's poorest maintained 100% of their disposable income when CPP, OAS and GIS kicked in at retirement.
The affluent, meanwhile rely more on their own RRSP investments, private pension, other savings, accounting for nearly 70% of their income during retirement; there is minimal reliance on public pension or OAS.
So what's the problem? In a country where financial literacy is at best, weak, tax efficient retirement income planning is a critical skillset, particularly because the wealthy pay proportionately more tax. For the advisor prepared to meet this opportunity, success is knocking at the door, with this much-demanded skillset.
For this reason The Knowledge Bureau has designed the MFA, Retirement Income Specialist designation program. Available not only to tax and financial advisors who wish to expertly advise on retirement income planning, the program also is of significant interest to clients who want to learn more about taking control of their cash flow when income from their day job diminishes or ends.
This designation program, available conveniently by self study, is made up of six courses designed to teach the ins and outs of retirement income planning from a tax efficient viewpoint. The six courses are:
Tax-Efficient Retirement Income Planning,
Financial Literacy: Relationship Between Risk and Return,
Portfolio Construction and Real Wealth Management,
Advising Family Businesses,
Owner-Manager Compensation Planning, and
The Use of Trusts in Tax and Estate Planning.
ìFor peace of mind, everyone should take the first course in the program,î says Evelyn Jacks, Program Director and co-author of Tax-Efficient Retirement Income Planning. ìA special bonus for our students is the retirement income projectors and tax calculators we have build for you to understand after-tax cash flow and capital encroachment required to fund your lifestyle wants and needs.î
Retirement for boomers is really a ìtransitionî to economic inactivity, rather than a specific event as experienced by our parents or grandparents. Put yourself in a position to be the specialist ñ the one knowledgeable and trusted advisor who can deliver the right solutions and in the process gather more assets and referrals than ever before. For more information call 1-866-953-4768 or visit knowledgebureau.com.
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