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Insight Newsletter

INSIGHT is a complimentary quarterly newsletter which is mailed to clients and other interested parties. It is produced entirely in-house. This publication explains tax and financial matters in simple terms. It communicates new developments in the business and financial world and assists you in managing your financial affairs better.

Current Issue: Spring 2010

• What's new at Nilson & Co.
• On Money
• Tax Season 2010
• Did you know...?
• Entrepreneurs on E.I.
• Estate Planning for TFSAs (on InvestorU.ca)

What's New at Nilson & Co.

We are pleased to announce that Jacqueline Russell successfully completed her requirements and has earned the international Certified Financial Planner (CFP) designation. With Diane Lefeaux’s retirement coming in May 2010, Jacqueline will assume full responsibility as Manager of Personal Client Services, which includes our Financial Planning Department.

Don completed his annual Winter round of Tax Update courses around the Lower Mainland. Stephanie attended the annual TD Ameritrade Conference in Orlando and shares her observations in Foresight.

We announced in the Winter that our Scholarship Program has been revamped for 2010 and the children and grandchildren of all Trivest and Nilson & Company clients are eligible to apply. The deadline for applications is April 30th.

The 2010 Federal Budget will be delivered after our printing deadline for this issue, and so we will cover its new provisions in the Summer edition.

On Money

“Money can’t buy happiness, still I’d rather be rich”

So go the lyrics to an old Sinatra song. The millennia-old question is how we nonetheless seek to make it do so, and academic research weighs in on the matter. Historical research has observed that the level of income has a reliable, but surprisingly weak, effect on happiness, particularly once basic needs are met. Rising incomes correlate with rising consumption but do not seem to correlate with rising happiness levels.

Academics Dunn et al recently conducted three research projects and concluded that how money is spent may be as important as how much is earned. “Life circumstances as predictors of happiness may be somewhat misplaced; because people readily adapt to the stable circumstances of their lives; circumstantial factors tend to have rather limited effects on happiness levels.”

Their three studies observed that spending money on others promotes happiness more than spending money on oneself, and prosocial spending was associated with significantly greater happiness. They even observed that small amounts of prosocial spending provided non-trivial gains in happiness. And yet, the amount of prosocial spending is relatively low in society, perhaps due to the cynical perception that too much goes to administration rather than the cause itself. A previous article on our website speaks to the “N+1” Strategy.

Tax Season 2010

We commence tax season this year on March 15th. Remember that the critical filing deadlines are March 31st for trust returns, April 15th for US returns and April 30th for Canadian returns. We will be requesting an interim payment of $75 per return, which will be credited on your final bill in early May. This checklist will help you get organized to have your returns done accurately and economically.

Bring:

• all copies of your slips: don’t separate the duplicate copies
• all medical and donation receipts: don’t bother writing out a list
• last year's assessment notice
• the backing sheet which came with the T5 from your broker
• the confidentiality authorization from your broker (if not already on file)
• the final instalment notice for the year from the tax department
• the purchase cost information of any stocks or bonds sold outside your RRSP/RRIF
• annual mutual fund statements for funds held outside your RRSP/RRIF
• receipts for qualified commuter and child fitness expenses
• receipts for your Home Renovation Credit expenditures
• annual trading summary and brokerage statements for the entire year for non-RRSP accounts
• a list of any foreign assets which may require reporting under the Foreign Asset verification rules

Remember:

• watch for T3 slips from trust units/mutual funds which may arrive throughout March and April
• phone us immediately if something arrives late
• make your March 15 tax installment
• doing a draft return usually doesn’t help us and takes extra time to reconcile
• file for reimbursement of medical costs under Pharmacare or your extended health plan

Please make an appointment to drop off your materials. The office is closed between noon and 1:00 pm daily.

Did you know...?

The 2010 auto limits remain unchanged from 2009. This means that employees can be reimbursed by their employer for business driving at the 52/46 cent/km rates, and employees will be assessed T4 benefits for personal use of company cars at the rate of 24 cents/km.
The 2010 RRSP limit increases by $1,000 to $22,000. This requires that your 2009 earned income is at least $122,222.
Employee gift recognitions in the form of cash and near-cash (eg. gift cards) do not qualify for tax-free treatment! Nor can the employee buy the gift and be reimbursed by the employer. Lastly, shareholders and their related parties cannot receive tax-free gifts of any kind or amount.
We are half-way through the two-year window to buy computers and printers and be able to write off their acquisition 100% in the year.
For those who are organized and on top of things…. the start of a new year is the time to: Make your 2010 TFSA contribution Make your kids’ 2010 RESP contribution Make your 2010 RRSP contribution If you are a Trivest client, we are already attending to these matters on your behalf. If you do not have the funds to make all of these payments early, think about setting up a direct contribution monthly from your bank account to these long term saving accounts. You will thank yourself come the end of the year!
“I have seen so many changes in my lifetime that I do not know how to go on. What will it be like for those who are born today and have long lives before them?” Thus spake Theresa of Avila in the 16th century. For the generation that entered adulthood with the invention of the hand calculator, it’s been quite a ride! And the next installment is “social media”, a phenomenon that modern-day businesses cannot ignore and modern-day consumers ought not to ignore. What comes into play with the business aspect of social media is the power balance in the market-place between suppliers and consume …”power to the people” is just around the corner. If you need an introductory “training course” on this new technological phenomenon, read “Six Pixels of Separation” by Canadian Mitch Joel.