Koroll & Company Blog

Global Intangible Low-Taxed Income, known as GILTI, is a newly introduced provision that requires United States shareholders to include additional earnings, in their gross income, for income derived from controlled foreign corporations (CFC).

It’s time to finalize your 2017 taxes and start planning for 2018. As with every new year, 2018 has its own set of payment and filing deadlines that every taxpayer needs to know about.

Below is a listing of significant dates and information that you will want to make note of.

RRSP Contributions

RRSPs can be a great tool for reducing your tax owing.

Unlike other tax planning tools, you can utilize your RRSP until March of the following year. As such, the RRSP contribution deadline for your 2017 tax return is March 1, 2018, unless you turned 71 in 2017. In that case, you RRSP contribution deadline was December 31, 2017.

We often discuss the benefits of Tax-free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs), as both tax planning and retirement saving tools.

As the year comes to a close many Canadians are taking advantage of year-end tax planning strategies to minimize their tax liabilities for 2017.

Even with Canada’s provincial healthcare plans, medical expenses can add up quickly. This is because the number of expenses not covered by these plans is constantly increasing.

If you are lucky enough to have a private plan through your employer, these costs may be reduced, but for many, there is no way around partially or fully paying for unavoidable medical expenses including, but not limited to:

• Dental care
• Prescription drugs
• Ambulances
• Physiotherapy

In the previous blog, we looked at the all important task of obtaining travel medical insurance before you travel. Now, let’s look at access to funds and residency.

Access to Funds

On a very practical level, such snowbirds need to think about how they will access funds needed to live out of the country for an extended period. Many snowbir

ds are eligible to receive monthly payments from both the Canada Pension Plan (CPP)and the Old Age Security (OAS). Fortunately, it’s relatively easy to arrange for payment of both while down south, as payments of both CPP and OAS benefits can be made by direct deposit to an account at a US bank where the Canadian recipient is located. Funds deposited in this way are converted to US dollars prior to deposit, and the exchange rate used by the Canadian government will typically be better than most which can be obtained locally.

As the days shorten and temperatures drop into the single digits, the thoughts of many Canadians turn to the idea of spending at least some part of the upcoming Canadian winter somewhere much warmer — most often, in one of the southern US states. And, while the less than robust state of the Canadian dollar relative to US currency has required Canadians to downsize some of those plans, it is still the case that thousands of Canadian “snowbirds” fly south during the worst of the Canadian winter.

Wherever they are going, and however long they are staying, it’s safe to say that the thoughts of those snowbirds are on enjoying the warm weather and the sunshine, and that the potential financial consequences or income tax issues raised by their trip down south are not top-of-mind.

Apart from Registered Retirement Savings Plan (RRSP) contributions made by individuals, tax planning strategies for 2017 must be completed by the end of the year. With December 31st fast approaching, there are only a few weeks left to take last minute steps towards reducing your 2017 tax bill. Luckily, there are a number of uncomplicated tax planning strategies that can be implemented in this short period of time.