Tips and Info

If you are a two-parent family, childcare expenses can be deducted by the spouse that has the lower income (subject to certain limitations). Single parents can deduct childcare expenses from their own income (subject to certain limitations).

These types of expenses include day nursery services, day camps, baby-sitting, boarding schools and camps. So be sure to keep receipts for all these items.

Charitable Donations
The maximum amount of donation you can claim in a given year is 75% of your net income. If you have receipts that total more than 75% of your income you can save them and use the credit in any of the following five years.

If you are married, combine your charitable contributions and claim them on the higher income spouse's return.

Moving to Canada
Are you considering it? There are many factors that need to be considered before you move. If your employer is relocating you, it may be important to you to negotiate for a payment to cover the higher taxes imposed in Canada.

Do you need help establishing what that amount would be? Do you have significant non-Canadian investments? If you do may be worthwhile to set up a foreign trust before you become resident in Canada. A foreign trust can be exempt from Canadian tax for up to five years after you become resident.

Planning for your retirement
RRSP are the best tools available for retirement savings. One question that we are frequently asked is: Is it better in the long run to maximize your RRSP contribution or to put the money towards the mortgage?

There is not such a cut and dry answer as many factors are involved in making this decision, i.e. your mortgage rate, amortization period, types of income earned in your RRSP, how many years you have left to contribute to your RRSP plan, etc.

However, one thing you could do is make your maximum contribution each year to your RRSP and use the tax refund gained from the contribution and apply it as a lump-sum payment towards your mortgage.

Self Employed
Are you self-employed? If you are, ensure that you deduct half of the CPP or QPP payments you have made on your 2001 tax return. The other half will be allowed for the tax credit. The non-deductible half will be eligible for a tax credit.

Dispositions of Eligible Capital Property
For tax years ending after October 17, 2000 the capital gains inclusion rate decreased from 66.66% to 50%. What does this mean for you? If you earning income in the top marginal tax rate your investments should yield capital gains, rather than dividends.

With the reduction in the capital gains rate this has reduced the top personal tax rate on capital gains below dividends. If you are in a lower tax bracket, the personal tax rate on dividends may be lower than capital gains, therefore you may not want to generate capital gains.

Federal Marginal Income Tax Rates Changes
Federal Marginal Income Tax Rates for Individuals changed, effective January 1, 2001, as follows:

  • The top tax rate of 29% that applied to taxable income above $60,009, dropped to 26% on taxable incomes between $61,509 and $100,000, however it continues to apply to taxable income levels above $100,000;
  • The middle tax rate dropped from 255 to 22% and the threshold at which it applies increased from $60,009 to $61,509;
  • The lowest tax rate dropped from 17% to 16% and the threshold at which it applies increased from $30,004 to $30,754.

Cargo Insurance Guide
Cargo insurance is much different than other liability or property policies, the scope is international and the extensions of coverage available are specific to the industry and broader than other lines of insurance.