...CHAPTER 6 – RRSP & OTHER SAVINGS PLANS Why a limit? * Each individual is only entitled to save a specified amount in a registered retirement savings plan * Through pension adjustment (PA), those who participate in employer sponsored plan are limited in how much they can give to RRSP * Limit is based upon earned income in prior year * RRSP contribution limit is cumulative....any amounts not used can be carried forward; therefore, all Canadian taxpayers should try to accumulate contribution room as early as possible. How about investment income???? Is that the same???? Not quite.....why??? The income earned on investments is not “earned income” --- which can be broadly defined as income that was “actively earned”. This leads us to the review of the formula for RRSP contribution limit and the definition of “earned income”. RRSP Contribution Limit: * Start with: * Lesser of: * A) 18% of prior year’s earned income (see below) * B) 2013 money purchase limit * Less: pension adjustment for prior year (from Module #5) * Less/add: PSPA (module #5) * Add: unused RRSP contribution room (carryover of amounts earned but not contributed) * Can be made from January of THAT year to 60 days afte the beginning of next year - contriubtions made in the first 60 days of the year can be used for previous year or the year of contribution Earned Income - Defined: * Generally, excludes income that is earned...
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...| | | | ------------------------------------------------- Top of Form Assessment >> Formal Assessment | | Assessment: End-of-unit formal assessment: Unit 4 (C192V10U4L0A25Q10) | Date Submitted: | 10/29/2011 09:01:00 PM | Total Correct Answers: | 1 | Total Incorrect Answers: | 4 | Your Mark (total correct percentage): 20% | | 1 | Once the Feltham's discharge their mortgage, what tax planning opportunity would be MOST APPROPRIATE during the years that immediately follow? | Incorrect | The correct answer: Mark maximizes contributions to a spousal RRSP for Sarah; Sarah maximizes contributions to her RRSP Your answer: Mark maximizes contributions to his TFSA only; Sarah maximizes contributions to her RRSP | 2 | Based on an analysis of Sarah and Mark's assets, from what tax advantages does the couple currently benefit? | Correct | The correct answer: deferral and avoidance only Your answer: deferral and avoidance only | 3 | If Mark exercises his 12,000 stock options at $39 and sells the underlying shares at the same time, what will his after-tax proceeds be? | Incorrect | The correct answer: $27,720 Your answer: $252,720 | 4 | In reviewing Sarah's method of remuneration from Cognitive Solutions, what statement is MOST APPROPRIATE? | Incorrect | The correct answer: Sarah should continue with her current form of remuneration as doing so creates RRSP contribution room for her. Your answer: Sarah should forego a salary and...
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...2014 YEAR-END TAX PLANNING TIPS INCLUDE: Certain expenditures made by individuals by December 31, 2014 will be eligible for 2014 tax deductions or credits including: moving expenses, child care expenses, charitable donations, political contributions, medical expenses, alimony, eligible employment expenses, union, professional, or like dues, carrying charges and interest expenses, certain public transit amounts, and children’s fitness and arts amounts. Ensure you keep all receipts that may relate to these expenses. 2) You have until Monday March 2, 2015 to make tax deductible Registered Retirement Savings Plan (RRSP) contributions for the 2014 year. Consider the higher income earning individual contributing to their spouse's RRSP via a “spousal RRSP” for greater tax savings. 3) The age limit for maturing Registered Pension Plans, RRSP, and Deferred Profit Sharing Plans is 71 years of age. 4) If you own a business or rental property, consider paying a reasonable salary to family members for services rendered. Examples include website maintenance, administrative support, and janitorial services. 5) This publication is a high-level summary of the most recent tax developments applicable to business owners, investors, and high net worth individuals. Enjoy! 1) A senior whose 2014 net income exceeds $71,592 will lose all, or part, of their Old Age Security. Senior citizens will also begin to lose their age credit if their net income exceeds...
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...Capital Losses • Tax Loss Selling What are Tax Deferral Plans? • Registered Pension Plans (RPPs) • Registered Retirement Savings Plans (RRSPs) • Registered Retirement Income Funds (RRIFs) • Deferred Annuities • Tax-Free Savings Accounts (TFSA) • Registered Education Savings Plans (RESPs) • Pooled Registered Pension Plans (PRPPs) What are Tax Planning Strategies? Summary 25•2 © CSI GLOBAL EDUCATION INC. (2013) LEARNING OBJECTIVES By the end of this chapter, you should be able to: 1. Describe the features of the Canadian income tax system, calculate income tax payable, and differentiate the tax treatment of interest, dividends and capital gains (and losses). 2. Calculate capital gains and capital losses and assess strategies for minimizing tax liability. 3. Describe and differentiate the different tax deferral plans and their uses. 4. Identify basic tax planning strategies and discuss their advantages. TAXES AND INVESTMENTS It is often said that there are only two certainties in life: death and taxes. Taxes are a reality of life for Canadians and they affect many personal and investment decisions. Complicating matters is the differential tax rates for income, dividends, and capital gains, not to mention continually changing legislation announced each year in the Federal Budget. The taxation of investment income also affects retirement planning through tax-favoured investments such as registered retirement savings...
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...territorial income taxes which are comparable to our state income taxes. There are really too many to list them all but they range from between around 5% to 21%, based on income margins. Capital gains income is subject to taxation of 50%, the other half is not taxed. Settlements and legal damages are generally not taxable, even in circumstances where damages (other than unpaid wages) arise as a result of breach of contract in an employment relationship. Personal income tax can be deferred in a Registered Retirement Savings Plan (RRSP) and tax sheltered savings accounts (which may include mutual funds and other financial instruments) that are intended to help individuals save for their retirement. Payroll tax is 4.95% which goes to CPP (Canada Pension Plan). It is a contributory, earnings-related social insurance program. The CPP program mandates all employed Canadians who are 18 years of age and over to contribute a prescribed portion of their earnings income to a nationally administered pension plan. And then an additional 1.78% goes to Employment Insurance. There are some of the same types of income that are not taxed as there are in the United States such as gifts and inheritances and death benefits paid from a life insurance policy. But there are many types of income that are not taxed such as lottery winnings, or winnings from other gambling or betting and capital gains on the sale of a taxpayer’s principal residence. Some forms of income are not declared, while others are declared...
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...Management From: Sheila Amparado Date: July 29’ 2012 Subject: Employee Benefits for Registered Nurses Introduction Within our Healthcare Organization there a number of diverse employees it is extremely difficult to maintain appropriate benefits for each specific individual. Although it is difficult we need flexibility to put the correct benefits in place. As stated on July 1, 2012 healthcare cost are rising and there has been a large number of claims. We are suggesting new appropriate benefits for our Registered Nurses. Recently the Human Resources Department and Upper Management attended a meeting to discuss different employee benefit plans. It was determined that our organization needs to reduce our companies total cost for these benefits. As an organization we are determined to provide our employees with best possible benefits that our company can afford at the present time. Nonetheless, employees and their families need employee benefits. There are several reasons why employees need benefits: medical care, ensuring future finances, unexpected absences, and tragic events. Our organization needs to provide employee benefits in order to keep quality employees with positive attitudes. I have complied a brief summary of employee benefits that the organization would like to offer Registered Nurses in the year 2013. Health Insurance When providing health insurance for our Registered Nurses in order to cut cost for the company the Human Resources department suggests...
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...Insurance Auto Insurance Home & Property Insurance Life Insurance Annuities Additional Insurance Solutions Medicare Solutions View All Insurance Banking Checking Accounts Savings Account Certificates of Deposit Credit Cards Home Mortgages Auto Loans Home Equity Products View All Banking Investments Mutual Funds IRAs Brokerage Services College Savings Plans USAA Managed Money Annuities Market News & Research View All Investments Retirement Retirement Planning Financial Planning Getting Started Growing Your Retirement Living in Retirement Military Retirement View the Retirement Guide View All Retirement Advice Personal Financial Plan USAA Wealth Management Managing Your Money Ask a Financial Advisor Share USAA Do you know someone who might be eligible for USAA? Invite them to discover the products and best-in-class service we offer our members. Share USAA Connect with USAA and our member community.Visit the USAA Community Hub Financial Advice Community Military Spouse Community Military Veterans Community Inside the Mission Blog USAA Mobile Corporate Info Newsroom Security & Privacy Careers Contact Us Site Map FAQs Site Terms Copyright © 2012 USAA. Investments/Insurance: Not FDIC Insured • Not Bank Issued, Guaranteed or Underwritten • May Lose Value USAA products are available only in those jurisdictions where USAA is authorized to sell them. Use...
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...Pension plans offered at different organizations are different but typically follow one of two main types. The defined benefit plan and the defined contribution plan are the two main types of pension schemes. The focus is always on helping the people when they retire. The state of Florida could benefit from re-opening the defined benefit plan for the state employees. The organizations should focus on a plan and be forced to keep it open for employees as long as they are with that organization. These pension plans often become the subject of budget cuts to save the organizations money and the employees suffered because of it. The defined benefit plan had the potential to pay a specific amount of retirement income for life. It may be based on the formula that takes into account your salary and years of service with your organization. In most plans, both employee and employer contribute. The company is...
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...IRS RETURN PREPARER TEST SPECIFICATIONS Revised August 11, 2011 Preface It is the goal of the IRS to administer a test that is founded on basic preparer competency. As such, the Registered Tax Return Preparer (RTRP) test will focus on the ethical responsibilities of federal tax return preparers and the completion of Form 1040 series along with the basic related schedules and forms. The test specifications provided below are intended to provide guidance on the content of the RTRP test. The examples provided within each item are not all inclusive of what may be tested in a given area. Tax preparers are required to pass this competency test in order to achieve the title of Registered Tax Return Preparer. Domain 1: Preliminary Work and Collection of Taxpayer Data 1. Review prior year’s return for accuracy, comparison, and carryovers for current year return. 2. Collect taxpayer’s biographical information (e.g., date of birth, age, marital status, citizenship, dependents) 3. Determine filing status 4. Determine all sources of taxable and non-taxable income (e.g., wages, interest, business, sale of property, dividends, rental income, income from flow-through entities, alimony, government payments, and pension distributions). 5. Determine applicable adjustments to gross income (e.g., self-employed health insurance, self employment tax, student loan interest deduction, alimony paid, tuition, and fees deduction). 6. Determine standard deduction and Schedule A itemized deductions (i.e....
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...shifts worth wile. The job requirements for being a registered nurse range from a diploma to a bachelor's degree. Associates degrees in nursing are offered at community colleges and take two to three years to complete. Bachelor's degrees in nursing are offered at colleges and universities which take four years to complete. Collegequest.com states graduates of nursing education...
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...Lesson 13: Investing in Mutual Funds What is a mutual fund? * A mutual fund is a professionally managed pool of money invested in stocks, bonds and other securities. * By purchasing mutual funds, small investors can easily diversify their investments and enjoy the benefits of professional management. * Investors own units or shares in the fund and benefit proportionately from any increase in value and/or income earned by the investments owned by the fund. The Reasons Investors Choose Mutual Funds | Mutual funds have grown in importance in Canada over the last twenty-five years. As of February 2008, there were 2,038 mutual funds with a total worth of nearly $679 billion – up from only $3.5 billion in 1981.The two major reasons investors choose mutual funds are: 1. Professional management - although there is no guarantee that the fund will outperform the market. 2. Diversification - by asset class (i.e. by holding a mix of stocks, bonds and money market investments) or within each asset class (i.e. by holding a variety of securities within each class). The risk of mutual funds arises from the risks associated with the investments they hold. * For example, a bond fund will be subject to interest rate risk – as interest rates rise, the value of the bonds owned by the fund will decline. | Mutual Funds With and Without Loads A load is a sales commission. In a load fund, the investor pays a commission every time he or she buys units (front-end load)...
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...d Research Proposal PENSION-WITHDRAWAL 2014 SAAMIRA IDREES (000032407) Bachelor of Business Faculty of Management and Computing 30th March 2014 Contents Abstract ................................................................................................................................................... 3 1.0 2.0 2.1 2.2 3.0 3.1 3.1.1 3.1.2 3.2 4.0 4.1 4.2 5.0 5.1 5.1.1 5.1.2 5.1.3 5.2 5.3 6.0 6.1 6.2 7.0 8.0 8.1 8.2 8.3 9.0 10.0 10.1 10.2 Introduction.................................................................................................................................. 3 Problem Statement and Rational for the Research ....................................................................... 4 Problem Statement ...................................................................................................................... 4 The Rationale for Research.......................................................................................................... 4 Objectives of the Study and Hypothesis ........................................................................................ 5 Research Objectives .................................................................................................................... 5 Main objective..................................................................................................................... 5 Secondary Objectives.............................................................................
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...solidarity You are on your own(Low individual responsibility): - Prolonged recession - Employers reduce benefits and shift cost/risk to employees - Acceleration of DB to DC - Minimal social security provision the value of hiring mature workers includes lower turnover rates, higher levels of employee engagement and higher skill levels particularly basic skills like math, reading and writing. Three key requirements to maximize the opportunities presented by ageing: - Effective collaboration among key stakeholders -Transformational change in thinking is required. Thinking towards incentive structures that reward long-term planning and societies that value and honour old age as a productive life phase - Integrated retirement and healthcare solutions are needed 2. What is an ‘opportunity mindset’ as opposed to a ‘challenge mindset’ as discussed in the paper summarising the World Economic Forum report? Explain with examples. Answer: |Domain |Conventional Mindset...
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...short- and longterm goals, such as funding college for children, business expansion, travel plans, or retirement needs. You should identify these goals with your financial adviser so that his or her recommendations will directly address your needs. (See the CFA Institute fact sheet “Managing the Relationship between You and Your Adviser” for more information on how to effectively communicate with your adviser.) Risk Tolerance Risk is often defined as portfolio volatility, or the fluctuation in the value of your assets over time. At a personal level, risk can mean the chance that you won’t achieve your goals or the risk of losing your savings. Understanding your tolerance for risk, which differs for each investor, is key to choosing an investment program. Your tolerance for risk is a very personal characteristic that may be difficult to determine and may change over time. Your emotional make-up plays a role in your willingness to take risk. But your objective ability to bear risk, given your wealth and financial needs, is important too. Your age may also affect how much risk you can assume: As you become older, there is less time to recover from poor investment results and your appetite to take risk may change — but your wealth and circumstances will probably change too. You may also have different risk tolerances for different parts of your portfolio, for example, money intended for retirement and educational funds for...
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...Our company is introducing a Group Registered Retirement Savings Plan (RRSP). The plan offers an attractive retirement investment options to our employees'. One of our main goals of this plan is creating a better future for our employees. We decided to offer them an RRSP which consists more benefits. Our plan includes the employee to contribute 1% to 5% of regular wages to the RRSP. The employer will match up to 3 % of the employee's contribution. Per example, if an employee decides to contribute 2%, the contributions of the employer would match the contributions of his employee on each pay period. Therefore, if an employee contributes 4% of the contributions, the employer will only contribute 3%. This contribution and investment earnings until their retirement. The investment could be ended at any age up to the end of the year where the employee turns 71....
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