Donna Mazerolle & Associates Newsletter

Issue 8 – December 2011

YEAR-END TAX PLANNING

It’s already December. This is the time of year where time seems to fly by. Office parties, family get togethers and trying to squeeze a month’s worth of work into 2 or 3 weeks before the business world shuts down for the holidays makes for a busy month.

It’s also the time of year where year-end tax-planning can significantly reduce taxes owed. Below are 15 year end tax planning tips. It only takes a minute or two to review. For those items that apply to your situation, give us a call at 506-657-4067 or 1-800-650-4067. You can count on us to make sure the correct forms are filled out.

Happy Holidays from everyone here at Donna Mazerolle & Associates, and best wishes for 2012.

Donna Mazerolle
www.DonnaMazerolle.com

Some 2011 year-end tax planning tips include:

Certain expenditures made by individuals by December 31, 2011 will be eligible for 2011 tax deductions or credits including: moving expenses, child care expenses, safety deposit box fees, charitable donations, political contributions, medical expenses, alimony, eligible employment expenses, union, professional, or like dues, carrying charges and interest expenses, certain public transit amounts, and children’s fitness and arts amounts.

You have until February 29, 2012 to make tax deductible Registered Retirement Savings Plan (RRSP) contributions for the 2011 year.
Consider contributing to a spousal RRSP to achieve income splitting in the future.
If you own a business, consider paying a reasonable salary to family members for services rendered to the business.
An individual whose 2011 net income exceeds $67,668 will lose all, or part, of their old age security.
Senior citizens will begin to lose their income tax age credit if net income exceeds $32,961.

Contact your professional advisors for assistance in managing your 2011 personal income.
Consider purchasing assets eligible for capital cost allowance before the year-end.
Consider selling capital properties with an underlying capital loss prior to the year-end if you had taxable capital gains in the year, or any of the preceding three years. This capital loss may be offset against the capital gains.
Registered Education Savings Plan (RESP)
A Canada Education Savings Grant (CESG) for RESP contributions will be permitted equal to 20% of annual contributions for children (maximum $500 per child per year).
Health and dental premiums for the self-employed
Individuals will be allowed to deduct amounts payable for Private Health Service Plan coverage in computing business income provided they meet certain criteria.
A refund of Employment Insurance paid for non-arm’s length employees may be available upon application to CRA.
Taxpayers that receive “eligible” dividends from private and public corporations may have a significantly lower tax rate on the dividends. Notification from the corporation to the shareholder is required.
Eligible public transit passes will be entitled to a tax credit.
A tax credit for children under 16, at the beginning of the year, enrolled in certain organized activities is available.
A Registered Disability Savings Plan may be established for a person who is eligible for the Disability Tax Credit. Non-deductible contributions to a lifetime maximum of $200,000 are permitted which are eligible for tax-deferred grants and bonds. Please contact your professional advisors for details.
If required income or Forms have not been reported in the past to the CRA, a Voluntary Disclosure to the CRA may be available to avoid penalties. Contact us for details.
U.S. Citizens and green card holders have U.S. filing obligations.