From parents and first time home buyers to tradespersons, public transit users and volunteer firefighters – there are a wide range of tax cuts available to Canadians everywhere.

Be sure you take advantage of the tax cuts available to you.  It makes sense to file electronically and on time.

This year millions of Canadians will take advantage of these tax cuts, will you?

• New Children’s Arts Tax Credit – save up to $75/child
• New Volunteer Firefighter’s Tax Credit – save up to $450
• First Time Home Buyers’ Tax Credit – save up to $750
• Children’s Fitness Tax Credit – save up to $75/child
• Public Transit Tax Credit – save up to 15%
• Tradesperson’s Tools Deduction – deduct up to $500 from income

For more information on these and other tax cuts, call CWF at 1-888-293-8040 or go to: cra.gc.ca/taxcuts

Are you married?  Do you have children?  Do you own a house or cottage?  Do you want to guarantee that your family or intended beneficiaries get your property when you die?  If you answered “yes” to any of these questions, it’s time to make sure you have a properly drafted will in place.

On death, your estate assets pass to others in a number of ways:

You can leave assets as an “outright” gift with no strings attached or “in trust” for a defined period of time (or the heir’s lifetime).  Outright gifts are easier to understand and to administer.  Generally, a trust is used when you want to give a beneficiary access to income but allow the executor to control and manage the capital.

The basic type of will and its details depend on a number of factors, the most important of which are:

The type of will you choose now may change in the future if any of the factors change.

The importance of having a will cannot be stressed enough!  Subject to provincial legislation which may require you to provide for your dependent family members, you can distribute your estate according to your wishes.  You have the freedom to choose an executor or executrix rather than relying on the courts to make the selection.  As well, a will may provide tax-planning opportunities that are not available if you die without a will (called “intestate”).

Let’s look at two intestate scenarios.  Let’s say that your sole asset is your fully paid for home, and you have a spouse and three children — did you know that your spouse may inherit only part of that house?  Without a will, provincial law may give your children part of your estate, whether you want that or not.  In this next example, assume that you own a mutual fund that is held outside your RRSP.  Without a will your children may inherit part of that asset, triggering tax on capital gains, just as if you had sold it.

If you have no will, your heirs will have to decide who among them will apply to the court to distribute your estate assets, and extensive additional paperwork may be involved.  The delay in distributing your estate could be substantial.  As well, the legal and court fees that arise would probably cost much more than having a will prepared.

By taking the time to prepare your will now, you can avoid the problems and confusion for your heirs who survive you.  You may also be able to avoid unnecessary tax problems.

For more detailed information on wills in your province or territory, you should consult your CWF financial advisor, lawyer or legal counsel.  These professionals have the expertise needed to properly advise you on your specific needs and situation.

Reduce Your Taxable Income Before Feb. 29

It’s RRSP season! The deadline to contribute to your RRSP is February 29, 2012. But WHAT, WHY and WHO should make a contribution? The Registered Retirement Saving plans is a type of Canadian account for holding savings and investments that grow in a tax shelter account and can be used later on as Income for retirement or even earlier to buy a house. RRSP is beneficial for you if you fall under one of these conditions:

1)      If you have cash now, but expect that you will be in a higher tax bracket later, then you can make the contribution and defer taking the receipt until you jump to a higher tax rate.

2)      If you expect your tax bracket will be lower in your retirement, then RRSP is the solution.

3)      Make RRSP spousal deposits, if he/she is in a lower tax bracket or is younger than the contributor.

4)      If you are a self-employed, then RRSP can be your pension replacement.

Just keep in mind “the longer the money is in your RRSP, the longer it can grow tax deferred.”

Feel free to contact me if you have any inquiries: ahmad.s@capitalworldfinancial.com

1) Giving gives back!

By inputting your donations to CRA registered charities, you could receive a 15% – 29% saving on them. Ensure to ask for an official receipt as you will not be refunded without it. You can carry forward unused amounts into the following year.

2) Public Transit pays off!

If you use public transit to get around, you and any eligible dependents that you have may be entitled to a 15% non-refundable tax credit. Environmentally friendly AND financially rewarding, public transport is taking you places!

3) Keep your receipts…
No need to send your receipts when you NETFILE your tax return, although the CRA may send you a request later for:

• Medical expenses
• Charitable donations
• Child care expenses
• Spouse or child support payments
• Moving expenses

Use a big envelope or shoe box as your “official tax slip holder” and keep all
tax related information there.

4) Save for retirement and save on your taxes!

If you invested in your RRSPs in 2011, your contributions are exempt from taxation as long as they stay in the plan. Invest early in the year to gain tax free interest on your investment and make your money work for you.

Important tax dates for tax season 2011

• Feb 13th 2012 – NETFILE Services are open
• Feb 29th 2012 – RRSP Deadline
• April 30th 2012 – Tax Filing Deadline
• June 15th 2012 – Self Employed Tax Filing Deadline
• September 30th 2012 – NETFILE services close for tax season 2011

Capital World Financial specializes in helping people get insurance when they are deemed by insurance companies to be high-risk.

There are many variables that can contribute to what an insurance company views as high risk.  For example:

• Occupation - Certain pilots, extreme sports athletes and high risk entertainers can be rated (have an extra premium attached to their policy) according to the risk associated to their occupation.
• Recreational Activities - Sky diving, scuba diving, bungee jumping and other high risk activies can all contribute to the amount of risk that is assessed on an applicant by an insurance company.
• Past or Current Health Issues - Cancer, heart disease, stroke or even diabetes and uncontrolled blood pressure can increase your risk-level assessed by the insurance company.
• Family History - Family history can affect your risk-level when assessed by insurers.

Depending on your situation, the type of insurance you should apply for may be different.

Plans:

• Traditional life insurance – require medical tests and health questions
• Simplified Issue insurance – where there are no medical tests and three to 12 health questions
• Guarantee Issue insurance - no medical tests and health questions

For some of my clients who begin investing in their future retirement through RRSP or TFSA the question arises ‘how can we avoid using these funds in the event we become disabled or critically ill?’ My simplest answer to them is no! The funds that you accumulate in a retirement fund are exactly for that purpose RETIREMENT. Whenever you invest in a long-term fund it is important to discuss investment insurance vehicles. In the event you become critically ill the best solution is to have a critical illness policy already in place because this will be the lump sum of cash needed to alleviate the costs that you will no doubt incur from hospitals to medication and treatment. In the event of disability a short term and long-term disability policy is also beneficial because it will provide a portion of your income while you are unable to work.

I always tell clients to leave RRSP or TFSA accounts alone in case of issues that arise. These funds are not rainy day solutions they are future income which needs to be left alone in order to grow properly. And with RRSP withdrawals there are tax implications which is another reason to leave the money alone until you absolutely need it. If you wish to protect yourself, your family and your retirement funds there are different insurance plans that can help you do this and allow you to enjoy a comfortable retirement with the income you have saved over the years.

The biggest surprise is the value an insurance policy can have for an individual or family and how much it relieves stress from their minds. Wouldn’t you want to know that in the worse case scenario you wouldn’t need to dip into retirement savings in order to pay medical bills or recurring expenses while on disability or recovering from a critical illness?

Feel free to contact us if you have any inquiries: richard.t@capitalworldfinancial.com

It may seem odd to be in your early to mid 20’s and thinking about saving for your retirement however there is one essential thing you can utilize to your advantage which is TIME. Consider a simple example comparing two individuals employed full-time. One is aged 25 the other is 45. Assuming each plans on retiring at age 65 and all else is equal at the moment the younger individual has double the amount of time to save up for this retirement than does the elder.

A misconception about retirement savings is we must put a large sum of money into a RRSP or TFSA on a consistent basis regardless of age. This is where being younger has its advantage. At age 25 the individual in this example could decide on a practical deposit of around fifty to one hundred dollars a month into his/her retirement fund. Essentially that can be translated into a night out with friends at a bar or restaurant or a round of golf for example. Thinking of your retirement planning in simpler terms can allow an individual to realize that they should start as early as possible. Utilize the time you have to your advantage and start small and build up your deposits as your mature and can afford it.

No sense in waiting until you are much older and realizing you want to a bulk of money saved up for your golden years. The easiest recommendation is to take a fixed amount off every paycheck and
deposit it into your retirement fund.

Feel free to contact us if you have any inquiries: richard.t@capitalworldfinancial.com

Did you know that:

• Group Benefits are temporary.
• Not all drugs are covered by the government.
• Life, critical illness, long term care, health, dental and disability insurance needs to be purchased when you are healthy.
• The average cost for cancer drugs which usually needs to be taken for up to 5 years is $500 per month.
• $32,489.00 is the total amount you’ll save in mortgage interest if you make one annual extra payment of $1,500 on a 25-year $300,000 fixed-rate loan at five per cent.
• You may be able to transfer up to 50 per cent of your pension benefits to a lower-earning spouse or common law partner.
• You should always claim your capital losses on investments, even if you don’t have gains since they can help offset capital gains from the three prior years and generate a refund on previously-paid taxes.
• Eligible medical expenses can include travel insurance, eye glasses and contact lenses. Disabled taxpayers can often claim modifications to a home or van.
• Balance protection insurance on your credit card usually only covers your minimum monthly payment.

Want to learn more tips. There is so much we can teach you.

Feel free to contact us if you have any inquiries: info@capitalworldfinancial.com

Many self-employed go into business for themselves with the goal of “achieving a better life”.

If you are self-employed let me ask you these important questions:

1. What will happen to you and your family if you should become sick or injured? How will it affect your lifestyle?
2. What would happen if you contracted a major critical illness such as cancer, heart attack or stroke?
3. If you should die, would your family be O.K. financially? Would they have to move, downsize, or otherwise reduce their standard of living? Would you really want that? Is mortgage insurance really enough?
4. Can you afford to not provide for medical and dental needs for your family? Are you avoiding the dentist because you feel it is an expense you can live without?

Unfortunately, many self-employed individuals answer these questions too late and sadly some will never get a chance, but leave their loved ones wondering why not.

Having a better life starts with staying in good health but how about protecting yourself if you do not?

Feel free to contact us if you have any inquiries: info@capitalworldfinancial.com

For the self-employed family looking for benefits, what
should be the priority sequence of benefit choices? How do these change as business and family
income increases and why?

As an employee working for a corporation you would probably
be provided with some sort of benefit package that will include some levels of:

• Life Insurance
• Disability Insurance (short and long-term)
• Medical Coverage (drug and health, health
  spending accounts, catastrophic medical coverage)
• Dental Coverage

With our well structured financial planning process, we can
help address all these areas within your budget and explain to you the benefits
and shortfalls of every choice. We will
help you look at the overall picture with the understanding that all issues
must be addressed. Our planning process
will be done with integrity, completeness, honesty and with your budget in
mind.

Feel free to contact us if you have any inquiries: info@capitalworldfinancial.com