The Ontario Clean Energy Benefit (OCEB) is helping Ontario families, farms and small businesses through the transition to a cleaner, modern electricity system. Thanks to the OCEB, Ontario families can expect stable bills this summer and fall with 10% off their monthly electricity bills.
Who is eligible for the Ontario Clean Energy Benefit (OCEB)?
All families, farms and small businesses in Ontario hat receive an electricity bill is eligible for this benefit.
How much is the Savings?
The OCEB provides a 10% rebate off your total electricity bill – including electricity costs, regulatory charges, the debt retirement charge and taxes.
What are the Benefits for Families?
A typical residential consumer will see annual savings of approximately $153.60.
What are the Benefits for Farms and Small Businesses?
Typical farm and small business savings could range between $1700 and $2050, depending on size and electricity usage.
How does one get the OCEB?
You don't have to do anything – the OCEB will be automatically added to every eligible consumer's bills for the next five years. The Ontario Clean Energy Benefit applies to electricity charges incurred as of January 1, 2011.
How Can You Save?
• Ontario Clean Energy Benefit
Provides a 10 per cent benefit to help consumers manage rising electricity prices for the next five years.
• Northern Ontario Energy Credit
A new, permanent energy credit designed to help families and individuals in the North who face higher energy costs.
• Ontario Energy and Property Tax Credit
Up to $1,025 for eligible Ontarians paid quarterly, beginning in 2011.
The Ontario Energy and Property Tax Credit (OEPTC)
What is this Ontario Energy and Property Tax Credit Program?
The Ontario Energy and Property Tax Credit (OEPTC) is designed to help low- to middle-income Ontario residents with the sales tax on energy and with property taxes. The maximum credit for 2010 is $1,025 for seniors and $900 for non-seniors.
A 2010 personal income tax return must be filed and the credit will be paid as a lump-sum as part of the 2010 tax refund or reduce taxes otherwise payable. For 2011, the maximum credit is $1,044 for seniors and $917 for non-seniors. The 2011 OEPTC will be paid in four installments starting in July 2011 and will be based on the personal income tax return filed for 2010.
Who is Eligible to receive the Ontario Property and Tax Credit?
• Ontario residents who are 18 or older, or had a spouse or common-law partner on December 31, 2010 (for both the 2010 and 2011 credits), or are parents who lived with their child in 2010 (for the 2010 credit) or who live with their child on the first day of the payment month (for the 2011 credit).
• People with low- to middle-income who pay rent or property tax for a principal residence in Ontario.
• People living on reserves are generally eligible for the energy portion of the credit, as are those people living in public long-term care homes.
How do you qualify for this Credit?
To receive the OEPTC, you have to apply for it by completing and attaching Ontario forms “ON-BEN” and “ON479” to your personal income tax return. These forms are included in the Ontario T1 general personal income tax and benefit package.
If you qualify to receive the 2011 OEPTC, based on your 2010 return, your payments will be issued in July and December 2011, and in March and June 2012.
Get the Tax Cuts Working for You ------ Reach out and Claim yours (Canadian Taxation)
Tax cuts are an essential part of the Government of Canada's effort to stimulate the economy and to create and maintain jobs
You may be able to save money by claiming any of the following tax credits:
• Children's fitness tax credit :The children's fitness tax credit is a non-refundable tax credit of up to $75 based on eligible fitness expenses (maximum $500) paid for each child who is under 16 years of age.
• First-time home buyers' tax credit: First-time home buyers can claim a non-refundable tax credit of $750 for the acquisition of a qualifying home.
• Pension income splitting: One of a wide range of tax cuts available. By choosing this option each tax year, pensioners can split up to 50% of eligible pension income with their spouse or common-law partner and reduce their overall tax paid.
• Public transit tax credit: The public transit tax credit is a non-refundable tax credit that helps individuals covers the cost of public transit.
• Tradesperson's Tools Deduction: Trades people can deduct from their income part of the cost of tools purchased throughout the year.
For more information visit Canada Revenue's web page for : Individuals
Canada's Economic Action Plan - Support for Workers
Canada’s Economic Action Plan – Support for Workers
(play the enclosed video)
· Retraining programs for laid-off workers
· Work sharing programs
· Extended Employment Insurance benefits
· New benefits for the self-employed
· Apprenticeship Programs and Incentives for workers who wants to change careers.
Apprenticeship Grantsare designed to encourage more apprentices to complete their training.Through the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant, registered apprentices who complete their apprenticeship training and receive their journeyman/journeywoman certification in a designated Red Seal trade could be eligible to receive up to a maximum of $4,000.
The Apprenticeship Incentive Grant (AIG)is a taxable cash grant of $1,000 per year, up to a maximum of $2,000 per person, available to registered apprentices once they have successfully completed their first or second year/level (or equivalent) of an apprenticeship program in one of the Red Seal trades.Apprentices should be aware that there is a deadline to apply. Apprenticeship Completion Grant (ACG)
The Apprenticeship Completion Grant (ACG) is a $2,000 taxable cash grant designed to encourage apprentices registered in a designated Red Seal trade to complete their apprenticeship program and receive their certification. Eligibility is retroactive to January 1, 2009.
The completion grant will be offered to apprentices who complete their training, become certified journeymen/journeywomen in a designated Red Seal trade and who obtain either the Red Seal endorsement or a provincial or territorial Certificate of Qualification.
Apprentices should be aware that there is a deadline to apply.
Tax Strategy: Spousal strategies – income-splitting can still work!
Spousal Tax Strategies – income-splitting can still work !
The new Tax-Free Savings Account (TFSA) and other federal tax changes may have you wondering about the value of one of the most basic tax-saving strategies for couples: “Income-splitting through a spousal Registered Retirement Savings Plan (RRSP)”. A spousal RRSP can still be a worthwhile way to reduce your family tax bite in certain situations. Here’s how income-splitting can work for you: It provides a means of reducing a family’s overall tax bill by shifting income from a higher earner to the lower-income earner so that family income is taxed at a lower rate. It may allow a couple to avoid a claw-back of Old Age Security (OAS) benefits by keeping each partner’s income below the prescribed threshold. Recent tax changes now allow Canadian retirees to split up to half of their eligible pension income (i.e. income that qualifies for the federal Pension Income Tax Credit) with their spouses or common-law partners. In addition, income-splitting with ‘non-spousal’ RRSPs is also permitted, but only after the contributor reaches age 65.
Here’s when a spousal RRSP can be a valuable addition to your personal financial plan: If you and your spouse intend to retire before age 65, the higher-earning spouse can contribute to a spousal RRSP but stop making those contributions three years before retirement. After retirement, the lower-earning spouse makes withdrawals from the spousal RRSP. Because no contributions had been made to the spousal RRSP during the previous three calendar years, none of the spousal RRSP income paid to the lower earning spouse is attributed to the higher earning spouse for taxation purposes. If a lower-earning spouse exits the workforce to take a parental leave or an educational leave, he or she can receive a payment from a spousal RRSP. In a year of little or no additional income, that person will pay little or no taxes. If one of you continues to work after age 71 and generates “earned income” for RRSP purposes, that person can no longer contribute to their RRSP but can contribute to a spousal RRSP until the end of the year that the spouse attains age 71. If a person dies and has unused RRSP contribution room, no contribution can be made to the deceased’s RRSP. However, a final RRSP contribution that is made to a new or existing spousal RRSP within 60 days following the end of the year of death is deductible on the deceased’s final tax return.
Is a spousal RRSP a worthwhile income-splitting strategy for you?
Ask your professional advisor about income-splitting and other tax planning and retirement savings strategies that can benefit you and your family.
This article is for general information only, not a solicitation to buy or sell any financial products. Consult your professional financial advisor for advice regarding your specific financial circumstances.
For more information on Canada's Economic Action Plan visit: actionplan.gc.ca
Tax-planning should be a year round activity but even if you’ve been otherwise occupied this year, you still have time to save money on your 2009 taxes by using strategies like these.Be deadline savvy:File your tax return and make tax payments on time to avoid penalties and interest. Payments that qualify for tax credits and deductions should be made by December 31.Deduct to save:Take full advantage of all tax deductions including the most important – your Registered Retirement Savings Plan (RRSP) deduction. Be sure to fill up all your RRSP contribution room.
Give yourself all the credit:Make full use of tax credits to reduce your tax bill by:
• Pooling medical expenses on the tax return of the lower earning spouse.
• Pooling charitable donations or carrying them forward for up to five years to surpass the
$200 threshold that increases your credit.
• Using the spousal credit for the higher-earning spouse.
• Transferring the age, disability, tuition and/or education credits to a spouse or supporting
relative when not used by a dependent.
• Don’t forget the first time homebuyer, home renovations and moving expenses credits.
Split to save:Income-split by sharing pension income with a spouse, through a spousal RRSP or by paying a salary to (eligible) family members. Be RRSP savvy:If you’re turning 71 this year, you must wind up your RRSP and need to decide whether to take the cash (poor choice), or transfer the funds to investments held within a Registered Retirement Income Fund (RRIF) or annuity (much better choices). If you have earned income, you can continue making contributions to a spousal plan until your spouse reaches age 71. Save tax-free:Make up to a $5,000 contribution to a Tax-Free Savings Account (TFSA). The contribution isn’t tax deductible but money and interest inside your TFSA is tax-free and so are withdrawals that you can make at any time for any purpose. Amounts withdrawn are added to your TFSA contribution room for the following year. Make down investments pay off:Plan to sell money-losing investments by the December 31 settlement date, which creates capital losses than can offset capital gains.Buy now to save:If you’re self-employed and claiming the capital cost allowance (CCA) on depreciable assets, buy them before year end to speed up tax write-offs.Move to save:If you’re moving to a province with a lower tax rate, do it before December 31 and you’ll pay the lower rate for the full year. If you’re moving to a province with a higher tax rate, try to delay until 2010.
And here’s the best tax-saving tip of all: Talk to your advisor before year-end to be certain you make the most of the other tax-reduction strategies
This column presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. Together with your financial advisor, you can explore strategies that is best suited to your financial situation.
Financial Planning is a general term used by most professional advisors – but not all financial plans are created equal … and they shouldn’t be. Your financial plan should be a perfect fit for your life as it is today, easily and quickly adaptable to the constant changes life throws at you, and always focused on achieving your longer term life goals. That’s a big – and important – deal.
So, the first question you must ask yourself is, Do I need a financial plan? The simple answer is yes – if you have an income, a family (or the hopes of one), dreams of a comfortable retirement, and any of the dozens of other financially-rooted reasons that are unique to you.
The next question is, What are the elements of a sound financial plan? There are two answers to that question: the general and the specific. In general, every financial plan should include: investment planning, cash flow planning, education planning, estate planning, insurance planning, retirement planning, and income tax planning.
The key to a successful financial plan is making sure that each of those elements is made specific to you and your needs – and to do that, a competent professional advisor will take you through this six step planning process:
1. Goal setting – to determine and prioritize your goals and concerns.
2. Data gathering – assembling the relevant financial information to understand your current financial situation.
3. Financial analysis – using your current and projected financial situation to identify and answer questions like: "How much tax must I pay?" How can my taxes be reduced?" Will I have enough income to cover my expenses during retirement?" "How can I better meet my income needs?" "How can I protect my family and income if I should become disabled or die unexpectedly?"
4. Plan formulation and recommendations – discussing, reviewing and deciding on various alternatives and solutions for achieving your financial goals and improving your overall financial life.
5. Plan implementation – providing you with a written report summarizing the steps you need to take to make your plan work.
6. Monitoring and plan review – financial planning is not a one-time event. You should review your plan at least annually or when major life events occur.
Comprehensive financial planning is complex and necessary. To be sure you get exactly the right one for your situation, it’s a good idea to put a professional advisor on your financial team – an advisor with the qualifications, tools and track record you can count on to develop a personalized financial plan that will the job for you – today and tomorrow.
This column presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances.
Making the most out of your retirement income Are you maximizing your retirement income? What are the sources of your retirement?
Living the retirement lifestyle you want means making the most of your retirement income over a longer and healthier span of years. And that definitely demands that you establish effective tax planning and tax management strategies aimed at maximizing your retirement income by reducing/minimizing your taxes and potential Old Age Security (OAS) ‘clawback’ pressures. When your net income reaches a certain threshold, then the OAS clawback kicks in. For 2009, the threshold starts at $66,335.
Here are three strategies to consider in your tax planning:
Income-splitting
This basically means structuring your investments and sources of income to lower your family’s total tax liability by shifting income from the hands of the spouse (or common law partner) in a higher tax bracket to the spouse in a lower tax bracket. You can do this in two ways:
Pension income-splitting. Allocate up to 50 per cent of your ‘eligible pension income’ (which includes income that qualifies for the federal Pension Income Credit and Registered Retirement Income Fund (RRIF) income for those over age 65) to your partner for taxation purposes.
Share Canada Pension Plan, Quebec Pension Plan (CPP/QPP) benefits. Applying to share your benefits with your partner can result in significant tax savings.
Tax Free Savings Account (TFSA's) for those 71 or older
At the end of your 71st year, you will be required by the government to wrap up your RRSPs and convert the proceeds, usually to a RRIF. A certain amount of RRIF income must be taken every year – but if you don’t need all of it to live on, consider putting the extra money into a TFSA where it can grow tax-free.
Monthly income portfolio
This mutual fund option is more flexible and tax-advantaged than other non-registered options. For example, a Guaranteed Investment Certificate (GIC) locks in money for a period of time in return for a fixed, guaranteed rate of return. That can lock you out of potentially higher future returns as well as creating an immediate tax bill on redemption.
On the other hand, a Monthly Income Portfolio (MIP's) is designed to provide maximum investment returns along with a monthly income. A portion of the monthly income is treated as a return on capital – a tax-deferral strategy that can provide you with increased after-tax monthly income.
There are plenty of Monthly Income Portfolio funds to choose from, depending on your investment preferences and tolerance for risk. There are also many other solid strategies for maximizing your retirement income by managing taxes. Talk them over with your professional advisor. This portfolio is commonly referred to as a T-series fund or tax efficient investments since a siginificant portion of the fund's cash distributions are return of capital (ROC).
This is presented for general information only and not a solicitation to buy or sell any investment product.. Consult your financial advisor for advice regarding your specific financial situation.
On January 27th, 2009, Finance Minister James Flaherty presented the minority government 2009 Federal Budget. This federal budget contains several measures of interest to individuals and businesses. The summary presented in this blog contains highlights of these budget proposals, which are not yet enacted.
Changes/ Measures Impacting Individuals:
Personal Tax Measures
Increase to the Basic Personal, Spousal and Eligible Dependant Amounts:
The basic personal amount, the spousal and common-law partner amount, and the eligible dependant amount increased from $9,600 in 2008 to $10,100 for 2009. The Budget 2009 proposes to further increase these amounts to $10,320 for the 2009 taxation year.
While the basic personal amount is not income tested, the spousal or common-law partner and dependant amounts are reduced by the net income of the spouse, common-law partner or dependant on a dollar for dollar basis.
Increase to Income Tax Brackets
Although no changes were announced to personal tax rates, the Budget proposes to increase the two lowest personal income tax brackets for 2009 beyond previously announced increases (which were based on inflation in 2008).
The personal bracket thresholds will continue to be indexed to account for inflation for the year 2010 and in the future years.
Increase to the Age Credit (a non-refundable tax credit)
The age credit provides a non-refundable tax credit for individuals who are 65 years of age or older. The age credit is calculated by multiplying the lowest personal tax rate (currently 15%) by an amount that is indexed on an annual basis. The 2009 Budget proposes to increase the amount upon which the age credit is based/calculated from $5,408 to $6,408 for 2009, with indexation of this age credit to be continued in the next years.
The net income level at which the age credit begins to be phased out at a rate of 15% remains unchanged at $32,312. With the proposed increase in the age credit amount, the income level at which the credit will be fully-phased out will increase from $68,365 to $75,032.
Tax Relief for Home Owners
Home Renovation Tax Credit
To encourage consumer spending and economic activity during this difficult time, the Budget proposes a temporary Home Renovation Tax Credit (“HRTC”), which will provide a 15% non-refundable income tax credit on eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant or accordance with agreements entered into after January 27, 2009.
The credit may be claimed on the 2009 tax return for the portion of eligible expenditures that exceeds $1,000 but is less than $10,000, and will provide up to $1,350 in tax relief (i.e., 15% multiplied by ($10,000 minus $1,000)).
Family members will be subject to a single limit based on their pooled expenditures. For this tax credit purpose, a “family” will generally be considered to consist of an individual, his or her spouse or common-law partner, and their children who were, throughout 2009, under the age of 18 years. Eligible dwellings are generally restricted to personal-use homes including houses, cottages, and condominium units.
Expenditures eligible for the HRTC
The HRTC is generally restricted to enduring renovations and alterations. Individuals will need to keep receipts for all expenditures.
RSP Home Buyers’ Plan
The Home Buyers’ Plan (“HBP”) allows the owner of a registered retirement savings plan (“RRSP”) to withdraw amounts from their RRSP on a tax-free basis to purchase or build a home. The maximum amount that can currently be withdrawn from an eligible person’s RRSP under the HBP is $20,000; the Budget proposes that this withdrawal limit be increased to $25,000 with respect to withdrawals made after January 27, 2009.
To be eligible to avail of the HBP, the RRSP owner must be considered to be a “first-time home buyer”. You are not considered to be a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the withdrawal, you or your spouse or common-law partner owned a home that you occupied as your principal place of residence. (There are special rules apply where the home is being acquired for the needs of a disabled person.)
An HBP participant must repay amounts that were withdrawn under the HBP to his or her RRSP over a 15-year period, or the unpaid amounts will be included in his or her taxable income (unpaid amounts for a particular year will be considered as taxable income).
First-Time Home Buyers’ Tax Credit (a new non-refundable tax credit)
The Budget proposes a new non-refundable tax credit for first-time home buyers who acquire a qualifying home after January 27, 2009. (The closing date for the purchase of the home must be after that date in order for the tax credit to be available.) The amount upon which the tax credit is calculated is $5,000, multiplied by the lowest personal income tax rate for the year (15%).The First-Time Home Buyers’ Tax Credit may be claimed in the year in which the home is acquired.
A “qualifying home” is a home that is eligible under the Home Buyers’ Plan, and which the person or the person’s spouse or common-law partner intends to occupy as their principal place of residence not later than one year after the acquisition.
This new tax credit will also be available for the acquisition of a home acquired after January 27, 2009 either by an individual who is eligible for the Disability Tax Credit (“DTC”) or by an individual for the benefit of a relative who is eligible for the DTC. The home must be acquiredto enable the DTC-eligible individual to live in a more accessible dwelling or in an environment better suited to the person’s needs.
The First-Time Home Buyers’ Tax Credit may be claimed either by the person who acquired the home or by his or her spouse or common-law partner. If a qualifying home is purchased jointly, the total amounts claimed by the couple cannot exceed the credit that could be claimed if only one individual had acquired the home (as mentioned maximum of $5000 multiplied by 15% as federal tax credit).
Other tax changes in Budget 2009 that will benefit individuals:
The National Child Benefit Supplement and Canada Child Tax Benefit
The Budget proposes to increase by $1,894 the amount of income that families may earn before the National Child Benefit Supplement (“NCBS”) is fully phased out, or before the Canada Child Tax Benefit (“CCTB”) begins to be phased out.
Specifically, for the 2009–10 benefit year, the income level at which the phase-out of the CCTB begins will increase to $40,726 (based on combined family income), and the income level at which the phase-out of the NCBS begins will increase by $1,894 such that it is completely phased out by $40,726 for the majority of families. This change is proposed to take effect for the 2009-2010 benefit years, which begins in July 2009.
RRSP and RRIF Losses after Death
Upon the death of the owner of an RRSP or a RRIF, the fair market value of the registered account owner at the date of death is included in the deceased’s income for the year of death. Any increase in the value of the RRSP or RRIF assets from the date of death to the date that the assets are distributed is taxable to the beneficiaries.
However, there is no provision under the Income Tax Act to recognize a decrease in value of the RRSP or RRIF assets that occurs after the date of death to the date the assets are distributed.
In light of the recent market developments, Budget 2009 proposes that, upon the final distribution of the RRSP or RRIF assets, the amount of any post-death decrease in the value of the RRSP or RRIF assets may be carried back and deducted against the RRSP or RRIF amount that was reported as income on the final tax return (terminal return) of the deceased. The amount that can be carried back as a deduction is equal to the difference between the fair market value of the RRSP or RRIF at the date of death and the total amounts paid out of the RRSP or RRIF after the death of the RRSP/RRIF owner.
This measure will apply with respect to a deceased person’s RRSP or RRIF where the final distribution from the RRSP or RRIF occurs after 2008.
Freeze Employment Insurance (“EI”) employee premium rates for 2010 at $1.73, the same rate as 2009; and increase all regular EI benefit entitlements by five extra weeks to a maximum of 50 weeks for the next two years to provide relief for individuals.
Temporary Relief Regarding Re-Contribution of RRIF Minimums
Last November 27, 2008 the Minister of Finance proposed that the minimum annual payout for 2008 applicable to a RRIF owner would be reduced by 25% to provide relief to seniors.
The proposal would allow a RRIF owner who had made a withdrawal from the RRIF in 2008 to re-contribute up to 25% of the "normal" RRIF minimum to a RRIF or to an RRSP (subject to age restrictions) and be able to claim a tax deduction for this re-payment amount on account of the market developments.
In the 2009 Budget, the federal government has confirmed its intention to proceed with the introduction of legislation to enact these proposals.
Business Tax Measures
The 2009 Federal Budget included several tax measures that provide relief to Canadian Controlled Private Corporations (CCPC's).
Small Business Limit
The Budget proposes to increase the small business limit from $400,000 to $500,000 as of January 1, 2009. The increase in the limit will be pro-rated for corporations with taxation years that do not coincide with the calendar year.
Accelerated Capital Cost Allowance
Manufacturing and Processing
The Budget proposes to extend the 50% straight-line accelerated capital cost allowance (“CCA”) rate for eligible assets for two more years to include 2010 and 2011. The half-year rule will apply to manufacturing and processing assets subject to this measure.
Computers (accelerated Capital Cost Allowance "CCA")
The Budget proposes a temporary 100% CCA rate for eligible computers and software acquired after January 27, 2009 and before February 2011, an increase from the current rate of 55%.These items will not be subject to the half-year rule, so a business can fully deduct the cost of an eligible computer and the systems software in the first year.
Electronic Filing and Penalties
The Budget 2009 proposes that corporations with annual gross revenues in excess of $1 million for a taxation year after 2009 will be required to file their income tax returns for the year in electronic format.
The Budget proposes to also introduce a penalty for filing a corporate income tax return in an incorrect format, although no penalties will be introduced until 2011.
This article is presented for general information only. Consult your financial advisor for advice regarding your specific financial situation.
