Watching gas prices rise as the weather grows (slightly) warmer is a regular experience for Canadians—a rite of spring, if you will. The difference this year is that gas prices, which are, in mid-April, already at a three-year high in some provinces (at around $1.50 per litre in Montreal and Vancouver) seem likely to break new records this summer.
Over the past few years, there have been a lot of changes to the Canada Pension Plan, both in terms of contributions made to the plan, and with respect to the receipt of CPP retirement benefits. One of the least well-known and least understood of those changes is the CPP Post-Retirement Benefit, or PRB.
The PRB exists because, for the first time, Canadians who are already receiving CPP retirement benefits can (or in some cases are obliged to) continue making CPP contributions through their employment or self-employment income. Before 2012, once an individual began receiving CPP retirement benefits, no further contributions to the CPP were possible.
This time of year the taxes that most Canadians are thinking of are the 2013 income taxes due on April 30. However, many Canadians will be reminded that the Canada Revenue Agency (CRA) is already thinking of taxes which will be owed for 2014 when they find an instalment reminder in their mail. For Canadians who have received many of such notices in the past, the reminder and the tax instalment process are familiar, although not necessarily welcome. For those who are new to that process, however, both the reminder itself and figuring out how to deal with it can be baffling.
Under Canadian law, all residents of Canada are subject to Canadian income tax. However, the reach of the Canadian tax system does not stop at the Canadian border, as all Canadian residents are taxable on their worldwide income, no matter where that income arises.
As December 31st approaches, the need to decide on and implement tax planning strategies for the year becomes top-of-mind for many Canadians. Under general tax rules, tax-free savings account (TFSA) contributions and withdrawals can be made at any time during the year, and registered retirement savings plans (RRSP) contributions for 2013 don’t generally have to be made before March 1, 2014. As outlined below, there are some situations, however, in which planning strategies involving TFSAs and RRSPs have to be put in place by the end of the calendar year.
The time of year is approaching when many Canadian employees look forward to something “extra” from their employer such as a Christmas or Hanukkah gift, a year-end bonus, or an invitation to the annual employer-sponsored holiday party. While it doesn’t necessarily fit well with the holiday spirit, it’s a fact that many such gifts (even, sometimes, attendance at the annual employee holiday party) may have tax consequences, sometimes in unexpected ways.
Every year, thousands of Canadians (mostly retirees) escape our winter by traveling south, usually to the U.S., for periods lasting up to even the entirety of winter. And while the value of the Canadian dollar relative to the U.S. dollar changes on a daily basis, the two currencies have been close to par now (or the Canadian dollar above par) for the last few years, making the cost of such a vacation easier to manage.
For most Canadians, spending hard-earned money on legal fees is about as appealing a prospect as paying income taxes. And, to make matters worse, a need for legal services is often associated with life’s more unwelcome occurrences (e.g., divorce, death, job loss, etc.). About the only thing that mitigates the pain of paying legal fees (aside, hopefully, from a successful resolution of the problem that created the need for legal advice) is being able to claim a tax credit or deduction for the fees paid.
