New Budget updates for 2012

07 Apr 2012 at 13:07

Brian Poncelet, CFP

Disabilities and Financial Planning, Disability News, Disability Tax Credit, Registered Disability Savings Plan (RDSP), Uncategorized

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New Budget updates for 2012

Here is some highlights from the Budget for 2012 regarding RESP and RDSPs.

Call us for more details.

Question : What rollover changes has the budget proposed for RESPs?

Answer For transfers that are made after 2012, the budget proposes to allow investment income earned in an RESP to be transferred on a tax-deferred (rollover) basis to an RDSP in certain circumstances if the plans have a common beneficiary.

Question: Under what conditions can the tax-free rollover be made?

Answer: To qualify for the tax-free rollover, the beneficiary must meet the existing age and residency requirements in relation to RDSP contributions. As well, one of the following conditions must be met:

the beneficiary has a severe and prolonged mental impairment that can reasonably be expected to prevent the beneficiary from pursuing post-secondary education;
the RESP has been in existence for at least 10 years and each beneficiary is at least 21 years of age and is not pursuing post-secondary education; or
the RESP has been in existence for more than 35 years.

Question: What are some of the consequences of a rollover?

Answer: When an RESP rollover occurs, contributions in the RESP will be returned to the RESP subscriber on a tax-free basis. As well, Canada education savings grants and Canada learning bonds in the RESP will be required to be repaid to HRSDC and the RESP terminated by the end of February of the year after the year during which the rollover is made.

Question: Is the amount transferred into the RDSP considered a contribution?

Answer: The amount of RESP investment income rolled over to an RDSP may not exceed, and will reduce, the beneficiary’s available RDSP contribution room. The rollover amount will be considered a private contribution for the purpose of determining whether the RDSP is a PGAP, but will not attract CDSGs.

Question: How is the transferred amount treated when it is withdrawn from the RDSP?
Answer: The rollover amount will be included in the taxable portion of withdrawals made to the beneficiary.

Disability Tax Credit and the other Missed Tax Credit.

13 Feb 2012 at 23:17

Brian Poncelet, CFP

Disabilities and Financial Planning, Disability News, Disability Tax Credit, Registered Disability Savings Plan (RDSP), Uncategorized

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The Caregiver Amount (Caregiver Tax Credit)
Another commonly missed tax credit is the Caregiver Amount or Caregiver Tax Credit. If, at any time in the year, you maintained a dwelling where you and a dependant lived, you may be able to claim this amount. The caregiver tax credit is the same dollar amount as the Disability Tax Credit Supplement which is $4291.00 for the 2011 taxation year. The dependant must be 18 years or older when they lived with you and must be dependent on you due to a mental or physical infirmity. This credit cannot be claimed for a person who was only visiting you. It cannot also be claimed if you claim the “Infirm Dependant Credit”, an amount of similar value to “The Caregiver Tax Credit”.

For further questions please contact us.

Average time Before purchasing life insurance after…

22 Oct 2011 at 19:32

Brian Poncelet, CFP

Disabilities and Financial Planning, Disability News, Uncategorized

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In Months

Experiencing a serious illness 9

Reaching a certain age 9.5

Death of a family member/friend 10

Birth of a child 10.5

Marriage 13.5

Purchasing a home 15

Natural disaster/national emergency 20

(source USA Today, Oct. 20, 2011)

What comes first Disability, Death or Taxes?

15 Jul 2011 at 14:02

Brian Poncelet, CFP

Uncategorized

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What comes first Disability, Death or Taxes?

Here is the answer, disability…then Taxes then Death!

When reviewing the Income Tax Act one finds a rule, which essentially says that the taxpayer is “deemed to have disposed”, of everything they own just prior to death. Therefore, the question is answered, the taxman always comes first!

If one talks to us before they become disabled such as a stroke, cancer or heart attack they could get up to $2,000,000 tax free! Call us now!

Rheumatiod Arthritis (RA) and the disability tax credit

26 Mar 2011 at 11:15

Brian Poncelet, CFP

Disabilities and Financial Planning, Disability News, Disability Tax Credit, Uncategorized

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Rheumatoid arthritis (RA) is a life-altering condition that affects about 300,000 Canadians. Unlike osteoarthritis (OA, the wear and tear form of arthritis that is more common in older people), RA can start at any age and often develops inpeople’s 30’s and 40’s. The diease can severely limit physical activities and cause distressing levels of pain,forcing many people to stop working and others to sacrifice their personal lives.

Often misunderstood disease, RA isn’t consistently treated with the urgency it deserves. RA symptoms vary widely from person to person. Deformities may develop over time as the inflammatory process damages the joints and supporting structures.

Knowing the odds

Gender: Women are three times more likely to develop RA than men.
Age: Often develops in the early mid-life years
Smoking: You can guess this one. Smoking increases the odds of developing rheumatiod arthritis

Source: Roche

Taxes: You may need to see if you or a loved one qualifies for the disability tax credit. Also, in some cases some types of disability insurance coverage may be possible. The best plan however is to get disability cocoverage while you are still healthy!

MS and the disability tax credit

05 Mar 2011 at 13:51

Brian Poncelet, CFP

Disability News, Disability Tax Credit, Uncategorized

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There is no known cure for MS. Treatments attempt to return function after an attack, prevent new attacks, and prevent disability. MS medications can have adverse effects or be poorly tolerated, and many patients pursue alternative treatments, despite the lack of supporting scientific study. The prognosis is difficult to predict; it depends on the subtype of the disease, the individual patient’s disease characteristics, the initial symptoms and the degree of disability the person experiences as time advances. Life expectancy of patients is 5 to 10 years lower than that of the unaffected population.

The biggest problem with Multiple sclerosis, is the different degrees it affects people. Even if one does not qualify for the disability tax credit there is still other tax credits you can still use to reduce your taxes that is often missed. Feel free to contact us http://www.disability-tax-credit.ca/.Also, another site to check out of course (though limited in any tax advice) is http://mssociety.ca/en/information/taxTips.htm

Disability Tax Credit

27 Feb 2011 at 20:15

Brian Poncelet, CFP

Disability News, Disability Tax Credit

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“The Disability Tax Credit is confusing and under-utilized by taxpayers for one simple reason – it is named incorrectly”, states Brian. “The Disability Tax Credit, by virtue of its name alone, leaves the credit on the table and not claimed by individuals who are in fact entitled to the claim.” For this reason alone, the credit should be referred to as the Restricted Quality of Life tax credit.”

How lack of financial advice hurts, and waiting times for medical help seems to be getting worse in Northern Ontario

21 Feb 2011 at 16:21

Brian Poncelet, CFP

Disabilities and Financial Planning, Disability News, Disability Tax Credit, Registered Disability Savings Plan (RDSP), Uncategorized

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We had a call from a mother who has a daughter (age 21). To get an evaluation she was told it would take 10 months or more to see a physiatrist to see see if her daughter has Obsessive Compulsive Disorder (they feel she may have had since 8!). If she can get the disability tax credit for her daughter, she can get the RDSP. Waiting almost a year to get some tests done does not seem fair!

There is only two banks in her town, TD and Scotia Bank the family’s debt is not properly covered by life insurance dispite the fact they do business with both banks. Since the banks do not offer any tax advice more money is lost as well.

If something happens to the breadwinner in the family how does the mother and daughter get looked after? Who is giving tax advice or financial advice here?

Why relying on your bank or tax preparer will cost ten of thousands of dollars for younger people who qualify for the Disability tax credit.

29 Jan 2011 at 20:36

Brian Poncelet, CFP

Disabilities and Financial Planning, Disability News, Disability Tax Credit, Registered Disability Savings Plan (RDSP), Uncategorized

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There is always changes to rules involving taxes. Here is an excellent example: many people at the bank are not likely to be aware of and tax preparers will not know if one’s child has an RDSP or RRSP holdings.So at time of death not having a financial planner who is aware of taxes and investments (like the RDSP) will cost the beneficary in terms of a lower lifestyle!!The existing rules governing the rollover or RRSP’s on death will be modified so as to allow the funds of a deased taxpayer to be transferred to the RDSP (registered disability savings plan) of a child or grandchild who, who at time of death, was fiancially dependent on the deceased by reason of infirmity. The new rules will take effect for deaths after March 3, 2010. Here is an example taken form CRA’s website regarding this important topic.

Under the terms of her deceased husband’s will, Nancy received $150,000 that her deceased husband’s estate had received from his RRSP in 2008. She decided to rollover $100,000 of this amount into her own RRSP and she kept the remainder. She included the $150,000 in income for 2008 and claimed a deduction for the $100,000 that was rolled into her RRSP.

In August of 2011, Nancy contributes $50,000 of her own funds and rolls over $100,000 from her RRSP into her son Joey’s RDSP, of which she is the holder. At the time of his father’s death, Joey was financially dependent, by reason of physical or mental infirmity, on his father.

Provided that Nancy elects (as the RDSP holder and as the individual eligible to claim the deduction), she will be able to claim a deduction of:

•$50,000 in 2008, to offset the $50,000 income inclusion; and
•$100,000 in 2011, to offset the $100,000 income inclusion resulting from her RRSP withdrawal.

Anyone who has an RDSP with a bank (since no mutual fund company or insurance company is currently offering an RDSP) needs to have a written plan which deals with the changes which seems to be happening every year. Do not expect the bank to do this or the accountant or the like, to be aware of your financial holdings…hence why you need a financial planner who is on top of this!

Still no RDSPs from Investors Group, Primerica and (many more) are losing up to $500,000 for their clients or more, in one’s lifetime!

22 Jan 2011 at 14:56

Brian Poncelet, CFP

Disabilities and Financial Planning, Disability News, Disability Tax Credit, Registered Disability Savings Plan (RDSP), Uncategorized

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The clients of Primerica, or Investors Group (and others) who have childern or adults who qualify for the disability tax credit, children or young adults who have Autism,Multiple sclerosis,•Feeding
(can’t feed themselves or takes significantly longer),
Epilepsy,•Walking
(can’t walk 100 metres or takes significantly longer),•Vision
(Blind in BOTH eyes, 20/200, 20 degrees field of vision) and many other problems not listed here…
http://www.disability-tax-credit.ca/disabilities-qualify.html
Are missing over $90,000 of government grants. Over a life time this can be at least $500,000 in lost money for the parents and children! Why lose money that is rightfully yours? Call us today! Remember you can not have a true “plan” that omits people who need help without reviewing taxes, this means missing out on free money from the government! Find out how to turn $20,000 into $164,000 in twenty years (if between 18 and 28) assuming a 3% rate of return. Call for details.

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