This is our annual Budget issue, in which we cover the 2015 Federal and BC Budgets. Do read the Budget article because there are a number of changes, including ones effective immediately in 2015 and which require proactivity.
The 2015 Federal Budget continues to contemplate legislating the end of Eligible Capital Property, which was created in 1972. It also continues to propose to facilitate GST/HST compliance for joint ventures. Lastly, the Feds are considering removing the Specified Investment Business tax rate from certain kinds of property income which has a significant business income character. Presently, such activities require more than five full time employees to be treated as active business.
As previously promised, the 2015 BC Budget eliminated the two year hike in the top tax bracket. Thus the top marginal personal rate returns to 43.7% in 2016.
We have built a “CPP calculator” which helps you to decide when to elect to collect your retirement CPP. Your CPP earnings history is plugged into the Calculator and produces insight into your decision.
Errin went “back to school” this winter and successfully completed her Level 1 Certificate in Financial Planning. Diane indeed will join the ranks of retirees this year. She is spending the summer teaching the rest of us about everything she does here. No small feat! Our newest staff member, Hunter LeBlanc, has done great things for Trivest since the end of Tax Season. He has automated the process by which client account analysis is updated, which allows us to spend less time data-entering and more time analyzing.
Our March seminar introducing Family ConFab: the Multigenerational Exploration of Wealthness was well attended and a hit. The ten module program, designed to inspire a healthy approach to the custodianship of money across Family generations, will launch this Fall. If you missed it, you can catch up with the Program here. Details of the Fall Program will be available later this summer.
Be sure to review our Tax Season Followup below for a large number of potential Action Points to keep your personal financial management in good shape. And enjoy the summer!
April 30th is Accountants’ New Year’s Eve– the end of the financial year when everyone’s taxes are filed. With another tax year now behind us, it is a good time to make “New Year’s” financial resolutions.
- If you may qualify for Guaranteed Income Supplement, BC Medical premium assistance or property tax deferral, make sure that you have attended to the application process.
- Property taxes are due in July and, if you qualify as a senior (over age 55) or a parent raising children (under age 18), you may wish to check out the property tax deferral options available. Click here for more information.
- If you qualify for GST credits, Universal Child Care or family benefits, these are recalculated starting July each year, based upon your family income as reported in the most recent tax year. The BC childhood tax benefit for those under age 6 will rise in April 2015.
- Pensioners’ entitlement to Old Age Security income is similarly recalibrated each July. If you had a one-off high income year last year, you may find yourself a victim of the clawback this summer, so watch carefully for your July receipt. You may consider submitting a T1213 OAS application to waive/mitigate the resulting reduced OAS income.
- RRSP contributors can start this year with a fresh resolve to make their RRSP contributions for 2015 before the deadline of next February.
- Get the jump on your TFSA and kids’ RESP contributions as well.
- The TFSA contribution limit received a bump-up of $4,500 for this year, so be sure your financial manager is taking care of that.
- You may need to review your 2015 tax instalment strategy with us.
- If you are reaching trigger ages of 60, 65 or 71 this year, address financial planning issues related to CPP, OAS and RRIFs.
- If you are a business, you may have enjoyed an employer EI premium rebate on your 2014 T4 filing. To claim it, you must simply reduce one of your 2015 remittances by that amount. Don’t forget!
- Starting in August 2015, upon proper application, the BC government will make a onetime RESP contribution of $1,200 for every child attaining age 6. There will be retro-active catch up for all children already age six if they were born after December 31, 2006.
- If you are over age 71 and thus receive annual payouts from your RRIF, the 2015 required minimum has been reduced retroactively. If you haven’t received this year’s payout yet, you will receive a lower amount than which appears on the RRIF statement from your financial institution. If you need the previous, higher amount, that is ok. If you already received the previous, higher amount, there is an unusual Budget provision that allows you to repay the excess back into your RRIF, by a deadline of February 29, 2016. This is particularly attractive if your RRIF was created before 1993. Again, your financial manager can assist with this.
- If your world includes a formal Trust, previous Budget changes will kick in at the end of 2015, which may have significant planning implications. See our website for coverage of this in the 2014 Budget.