Mitch Reynolds, Cfp - Certified Financial Planner At Sun Life Financial

FREE SEMINAR: My upcoming seminar is on "Saving for Your Children's Education", and will be held on September 20 at 5:30 pm. The last seminar filled up quickly, so please get your tickets early if this is a topic of interest to you. Free tickets can be secure on Eventbrite - link below. #education #RESP #educationsavings https://bit.ly/2BiiyHz

ADVNACED #TAX #TIP: Let's look at the Canada Pension Plan payroll tax today. That is just how many people think of it - as another payroll tax, but in fact it is a contribution you make to a defined benefit pension plan run by the federal government for all Canadians (unless you live in Quebec, which has the QPP).
The formula for your contributions as an employee is 4.95% of your salary, minus $3,500 basic exemption, up to a maximum of $55,900 (the Yearly Maximum Pensionable ...Earnings, #YMPE, for 2018).
Example, assume you earn over $55,900, you will pay the maximum of $2,593.80. $55,900 - $3,500 = $52,400 $52,400 * 4.95% = $2,593.80
If you earn $40,000 per year you can apply the same formula and pay $1,806.75 per year.
Your employer will contribute the same amount as you to #CPP for your annual contribution. This is an extra employment expense above your salary that your employer bears to have you on payroll.
Self-employed people, like me, pay the whole thing. So just take the calculation above and multiply by 2.
This does earn you pension credits that you can start to draw from between ages 60 and 70, so your "tax" will pay you back, but again it will be taxable income. The one benefit is that your CPP contribution is tax deductible each year. #financialplanning
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Should you retire early or late? It's both a financial question (being able to afford to retire early is much more expensive for multiple reasons) and a social question (do you fit into a retirement community being younger than your peers). Some good points to consider here.

ADVANCED #TAX #TIP: What is better from a tax perspective to use for retirement savings - and #RRSP or a #TFSA?
When I'm helping my clients do #retirementplanning, there is always a concern about paying too much #taxes in retirement. Both the Canada Pension Plan and Old Age Security Pension incomes will be taxable benefits. Assuming you are getting the maximum of both (currently $13,610 for CPP and $7,160 for OAS annually) you're earning $20,770 - putting you into the first t...ax bracket of 25% (Alberta).
If you have a pension income from your employer, this will be added on top government benefits as additional income. It is always best to keep your taxable income in retirement under the OAS clawback threshold - $73,756. Earning taxable income above this threshold will mean your OAS benefits are reduced by $0.15 for every dollar you earn.
When doing a #financialplan, it is always best to try keep taxable income inside the second tax bracket and below the OAS clawback limit. Creating additional tax free income from your TFSA is very desirable after that. If you have hit the maximum you can contribute to the TFSA, then consider a non-registered/open investment that generates mostly Capital Gains income, where only 50% of the gain is taxed as income, and 50% is free.
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ADVANCED #TAX #TIP: What is better from a tax perspective to use for retirement savings - and #RRSP or a #TFSA?
When I'm helping my clients do #retirementplanning, there is always a concern about paying too much #taxes in retirement. Both the Canada Pension Plan and Old Age Security Pension incomes will be taxable benefits. Assuming you are getting the maximum of both (currently $13,610 for CPP and $7,160 for OAS annually) you're earning $20,770 - putting you into the first t...ax bracket of 25% (Alberta).
If you have a pension income from your employer, this will be added on top government benefits as additional income. It is always best to keep your taxable income in retirement under the OAS clawback threshold - $73,756. Earning taxable income above this threshold will mean your OAS benefits are reduced by $0.15 for every dollar you earn.
When doing a #financialplan, it is always best to try keep taxable income inside the second tax bracket and below the OAS clawback limit. Creating additional tax free income from your TFSA is very desirable after that. If you have hit the maximum you can contribute to the TFSA, then consider a non-registered/open investment that generates mostly Capital Gains income, where only 50% of the gain is taxed as income, and 50% is free.
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Here's an article about saving too much money into your RRSPs, and how much more wealth you can create by saving into your Tax Free Savings Account and non-registered investment plans.

ADVANCED #TAX #TIP: If you own a private corporation, you could save a lot of money in taxes by having the corporation own your #lifeinsurance policy instead of you owning it personally.
Assuming the business you own qualifies for the #smallbusiness tax rate (12% in Alberta), your after tax cost to pay premiums can be significantly reduced. Since life insurance premiums are paid for with after tax dollars, the lower, small business tax rate means the business has a lot more m...oney to pay these premiums with.
Let's look at a simplified example. Say the business owner needs $2 million of life insurance, and he is 45 and a non-smoker. his premium would be $3,625 per year (Term 20). If he was at a 39% marginal tax rate, he would need to earn $5,943, pay $2,318 in taxes to have the net after tax dollars to pay the premium.
If the business paid the premium for him, the cost would be $4,119 before taxes, and only $494 is paid in taxes for this premium each year. Over 20 years this is a #savings of $36,480.
I would caution the business owner to have a small amount of personal life insurance, say $250,000 - for immediate cash flow for his family. It could take 6-12 months for the business owned life insurance to flow through to become tax free cash in the hands of the family.
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This article is about turning your term life insurance premium into a highly profitable tax sheltered investment and tax free cash flow by using permanent, cash value life insurance.

ADVANCED TAX TIP: Today's tax tip is about Charitable Giving/Donations and how much you get back from supporting registered charities.
This tax tip is using specific rates for Alberta, but the benefits are high for every province.
A Canadian is allowed to donate up to 75% of their Net Income to a registered charity each year (this increases to 100% in the year of death - terminal tax return). This is always a NON-REFUNDABLE tax credit - it can reduce taxes owing to $0 but not... give you extra money back.
For the first $200 donation, the tax credit is at the lowest rate - 25% in Alberta. After that, all donations are at 50% non-refundable tax credit (21% Alberta and and 29% Federal). If you earn more than $200,000, then the Federal tax credit increases to 33%.
Let's do the math on a donor who earns $150,000 and gives a total of $20,000.
First $200 @ 25% = $50 Next $19,800 @ 50% = $9,900 Total tax credits of $9,950
The donations of $20,000 actually only cost the donor $10,050 out of pocket. This is assuming he owed more than $9,950 that year in taxes to the government!!
This makes charitable giving a good, and cost effective, way to help out causes you believe in while reducing your total tax burden.
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I have written an article on 3 strategies to create wealth and help plan for your child's financial future. These ideas can give your child a bright financial future they can build on and fast track them to financial independence.

Here's my latest article about the different tax free assets Canadians can own to build wealth - TAX FREE! There are three main asset types in this article that I go into. I hope you enjoy the read.

Here is a more detailed analysis of whether or not Critical Illness Insurance is a valuable risk protection solution to keep your RRSP and retirement savings plan in track. I hope you read it - very eye opening when you look at the risk of losing more than half your retirement nest-egg.

You can double your retirement nest-egg by simply "opting-in" for regular, automatic increases to your monthly savings rate.

Now that tax season has passed for 2018, it's time to clean out those dusty cupboards of your financial affairs. Here is a 10 step process to do your financial spring cleaning.

I've known Mitch for over 10 years. I think Mitch is dynamic person and terrific motivator who brings the best out of people.

Great page Mitch - hope that we can help a lot of people - Life is better under the Sun :-)

Awesome

I've known Mitch for over 10 years. I think Mitch is dynamic person and terrific motivator who brings the best out of people.

Great page Mitch - hope that we can help a lot of people - Life is better under the Sun :-)

Awesome

I've known Mitch for over 10 years. I think Mitch is dynamic person and terrific motivator who brings the best out of people.

Great page Mitch - hope that we can help a lot of people - Life is better under the Sun :-)

Awesome

I've known Mitch for over 10 years. I think Mitch is dynamic person and terrific motivator who brings the best out of people.

Great page Mitch - hope that we can help a lot of people - Life is better under the Sun :-)

Awesome

I've known Mitch for over 10 years. I think Mitch is dynamic person and terrific motivator who brings the best out of people.

Great page Mitch - hope that we can help a lot of people - Life is better under the Sun :-)

Awesome