Trusted Tips and Resources

Trusted Tips & Resources

Trusted Saskatoon Financial advisor a tip on RRSP Tips and Deadlines


RRSP Season is here, as financial advisors prepare for another busy season, I wanted to give YOU some important information on RRSP’s, limits; and deadlines to help prepare you to make your investment decisions a bit easier. The RRSP deadline for tax year 2014 is March 2nd 2015. If you are looking to reduce your income tax payable (subject to the below conditions), please book an appointment before March 2nd.

RRSP contribution room is based on “earned income”. Generally speaking, earned income includes a taxpayer’s income (earned while the taxpayer was resident in Canada) from the following:

  • income from office or employment reported on a T4 slip (line 101 of the tax return)
  • other employment income (line 104) – this includes foreign employment income, which must be reported in Canadian dollars.
  • Employment income on a US W-2 slip may have been reduced by contributions to a “401(k), 457 or 403(b) plan, US Medicare and Federal Insurance Contributions Act (FICA)”. These amounts must be added to foreign employment income on line 104. However, based on the Fifth Protocol to the Canada – U.S. Income Tax Treaty (Article XVIII), starting with the 2009 tax year, these amounts may be deductible on line 207 of your tax return.
  • income (less loss) from a business carried on by the taxpayer, either alone or as a partner actively engaged in the business
  • income (less loss) from rental of real property
  • royalty income regarding a work or invention of which the taxpayer was the author or inventor
  • taxable support payments received
  • CPP or provincial disability pension income
  • amounts received under a supplementary unemployment benefit plan (not federal Employment Insurance)
  • less deductible support payments made

The maximum RRSP contribution amount that can be deducted is called the “RRSP deduction limit”, and is also known as “contribution room” or “deduction room”. Your deduction limit is found on your Notice of Assessment or Notice of Reassessment from Canada Revenue Agency (CRA). Your 2014 limit would be on your 2013 Notice. The deduction limit is calculated as:

  • 18% of “earned income” for the preceding year, to an annual maximum (see following table)
  • less the “pension adjustment” amount, for participants in a Registered Pension Plan (RPP) or Deferred Profit Sharing Plan (DPSP)
  • less any “past service pension adjustment”, for participants in a RPP or DPSP
  • plus any “past service pension adjustment” reversals
  • plus unused deduction room carried forward from the previous year

The annual limits for RRSPs, money purchase (defined contribution) RPPs, deferred profit sharing plans (DPSPs), and defined benefit RPPs are: (*source,


Annual Contribution Limits

Defined Benefit
RPPs – Max Pension
Benefit per
Year of Service
RRSPs Money
Purchase (MP)
2005 $16,500 $18,000 $9,000 $2,000.00
2006 $18,000 $19,000 $9,500 $2,111.11
2007 $19,000 $20,000 $10,000 $2,222.22
2008 $20,000 $21,000 $10,500 $2,333.33
2009 $21,000 $22,000 $11,000 $2,444.44
2010 $22,000 $22,450 $11,225 $2,494.44
2011 $22,450 $22,970 $11,485 $2,552.22
2012 $22,970 $23,820 $11,910 $2,646.67
2013 $23,820 $24,270 $12,135 $2,696.67
2014 $24,270 $24,930 $12,465 $2,770.00
2015 $24,930 $25,370 $12,685 $2,818.89
2016 $25,370 indexed 1/2 the MP limit 1/9 the MP limit


Trusted Saskatoon Financial advisor tip on Insurance

Protecting your business with buy-sell insurance

While business owners may include a buy-sell provision in their shareholder agreement, many small business owners do not know what a buy-sell agreement is, and how simple it can be to set up.

Buy-Sell insurance provides funds for buying out the ownership interest of a partner when he or she dies or becomes disabled.

With an unexpected death of a business owner, whether or not it is a small business, partnership, or family farming operation – In the absence of a clear arrangement and adequate funding, surviving partners often feel “stuck” after the death of one partner, and the aftermath of having to deal with that partners spouse.

So how can we begin to fix this? It’s simple….Really!

First, we have to understand the 3 different methods of a buy-sell agreement

  • Promissory Note Method- Using this method, the operating company purchases a life or disability insurance policy on the life of each shareholder. The company names itself as the beneficiary of the policies and a Buy/Sell funding agreement is put in place requiring the surviving shareholder(s) to purchase the shares of the deceased shareholder at fair market value (FMV). On the death of one or more shareholders, the company receives the insurance benefit and pays the proceeds to the surviving shareholder(s) as a capital dividend, allowing them to honor the promissory note.

  • Corporate Redemtion Method- The operating company purchases an insurance or disability policy on the life of each shareholder, the company of whom is named as the beneficiary of each of the policies. This method would require the company to purchase and then cancel (or redeem) the shares of the deceased shareholder.
  • Criss-Cross Method– Each shareholder purchases a life insurance policy on the life of the other shareholder(s), and names himself or herself the beneficiary. The shareholders and the company then complete a buy-sell agreement that requires the surviving shareholder(s) to purchase the shares of the deceased shareholder, at fair market value (FMV). If the shareholder dies, the surviving shareholder(s) use the proceeds paid from the deceased policy to purchase the shares from the shareholders estate.

Regardless of which method you think might work well for you or if you already have a structure in place but want a second opinion, an independent financial advisor is a key component to helping you structure the most efficient buy-sell agreement for your business, and find the appropriate coverage for you. Lets work together.

If you are interested in learning more about how to bulletproof your business structure, and get a free no obligation review from a TRUSTED SASKATOON financial advisor, contact me today!



Trusted Saskatoon Financial Services experts share a tip on savings plans

Savings plan - GIC vs. TFSA 

Jamie McHattie: I want to start saving money…not an RRSP but something like a tax free savings account or GIC but I don’t know exactly what they are or which is the best way to go. Help please?!

Answer: Good for you – having a saving plan is the base of every successful financial security plan. Once you have a savings plan for emergencies or opportunities, other parts of your plan such as home ownership or investments are more secure. There are a few different products to use for a savings plan.

GIC stands for Guaranteed Investment Certificate. This is a plan that locks in your money for a length of time and guarantees you interest. Generally, the longer the term of the investment – the higher the interest rate. A non-redeemable GIC means that you cannot withdraw the savings until the term is up. A redeemable GIC means that you may be able to withdraw the money, but there will be an interest adjustment based on how long the money was actually invested for. A GIC can be held in a RRSP, in a TFSA or just as a non-registered plan. Interest earned on a GIC that not in a RRSP or a TFSA will be taxed.

TFSA stands for Tax-Free Savings Account. It is a registered plan (by registered, it means that Canada Revenue Agency (CRA) tracks it), that allows you to invest up to $5,500 per year and the earnings on the investment are not taxed. There is no tax refund though. There is a carry forward so if you have never invested in a TFSA – you can contribute up to $5,500 annually. This is an increase from the annual contribution limit of $5,000 for 2009 through 2012. You can invest for short term or long term in your TFSA. A TFSA is most tax effective for high risk investments such as stocks or high risk mutual funds as that is where you have the most potential for investment growth that you wouldn’t pay tax on. However, for short-term investments, the TFSA is still a good place to save. You can invest in a high yield interest account that allows full access, no risk on your investment but a low rate of return.

The most important part of a financial security plan is to start now on a regular basis – pay your-self first!

Trusted Saskatoon Financial Services tip on the 2014 YEAR-END TAX PLANNING CHECKLIST

 Saskatoon Directory in our Trusted Saskatoon Financial Services category


Financial planning is time sensitive. While the following list is not exhaustive, here are some items that must be considered, incurred or paid prior to year-end in order to be included in your 2014 tax return.

Prior to December 24, 2014:

Put tax loss selling strategies to work by following these steps:

  1. Calculate the capital gains that you have realized for 2014.
  2. Identify and sell investments that are in a loss position. Trades entered by December 24th will settle funds in the account prior to December 31st.
  3. Net your capital losses against capital gains on your 2014 tax return. Note:

If your spouse has unrealized capital losses, extra steps can be taken to incorporate them in your tax planning. In all cases, you should be aware of the superficial loss rules when employing these strategies.

Prior to December 31, 2014:

  • Make charitable donations. Donating qualifying securities instead of cash can increase your tax savings.
  • Contribute to your child’s RESP/RDSP.
  • Withdraw funds from a TFSA, if needed. Any withdrawals will increase your contribution room in 2015.
  • Withdraw funds from your RRSP if you are in a low tax rate for the 2014 tax year.
  • If you are age 71 this year, you must convert your RRSP to a RRIF. Consider the following:
  • Use your younger spouse’s age for minimum payment calculations.
  • Make an advance contribution to your RRSP for earned income from this year.
  • Pay all tax deductible expenses.
  • If you are a trustee of a testamentary trust, consider triggering income (like capital gains) before the end of the year as income retained inside the trust will be taxed at the highest marginal tax rate starting in 2016.
  • Stock Option Rules – Special Relief: If your taxes are higher than the proceeds upon the sale of your shares following the exercise of your stock options, there is some relief if you sell the shares prior to 2015 and make a proper election prior to December 31st, 2014.

For Corporations:

  • If you are selling the assets of your corporation, be sure to complete the transaction by December 31st, 2014. the tax treatment on the sale of eligible capital property will be changing in 2015.
  • Consider paying an employee a non-cash gift or award of up to $500. This amount may be deductible to you and non-taxable to the employee. For January 2015: Remember to pay interest on prescribed rate loans (e.g. spousal loans) prior to January 30th. 

March 2015:

  • You have until March 2nd, 2015 to make your RRSP or a spousal RRSP contribution, and deduct the amount on your 2014 (subject to your RRSP contribution limits) tax return.

Ongoing reporting obligations:

  • If you hold foreign property with a cost base greater than $100,000, file the Foreign Income Verification Statement (CRA Form T1135). As of June 2014, new rules apply to disclosure of this information.
  • If you are a U.S. Person for tax purposes, understand your IRS reporting requirements. U.S. Persons (even those who are resident in Canada) have tax reporting requirements in the U.S. For example, U.S. persons are required to report any holdings in Passive Foreign Investment Companies (PFICs).

Note: Beginning in 2014, Canadian financial institutions are required to report certain information on U.S. persons as a result of the U.S. Foreign Account Tax Compliance Act (FATCA).

New tax measures:

Family Tax Cut – Income Splitting:

  • In the October 2014 Federal Tax Update a new non-refundable tax credit of up to $2,000 was introduced for eligible couples with minor children. The new credit will be effective for the 2014 and subsequent tax years.

Child Care Expenses and The Universal Child Care Benefit:

  • Effective 2015 there will be an increase in the Child Care deduction by $1,000. The Universal Child Care Benefit (UCCB) will also increase to $160 per month for children under the age of six, and $100 per month for those ages six to sixteen. As a result of the UCCB changes, the Child Amount Tax Credit is being repealed in 2015.

We recommend you discuss these strategies with your professional investment, tax and legal advisors prior to implementation to ensure they fit.


Trusted financial services tip on Insuring our Families

Saskatoon Directory in our Trusted Saskatoon Financial Services category.

 tip on Insuring our Families:

No one likes to talk about it because no one wants to entertain the thought. Parents dare not imagine for a single moment the possibility of one of their children receiving the diagnosis of a critical illness or passing away.

Yet, not talking and not thinking about the financial consequences of unfortunate events such as a critical illness or the death of one of our children, does not make the possibility of these situations less likely. Having sufficient and appropriate insurance coverage for parents and children is an integral part of family financial planning.

Besides providing funds to cover funeral expenses, insurance for children will provide a financial cushion in the event of a disaster. This will allow parents to take the additional time off work needed to cope with such an ordeal.

Acquiring insurance for minor children also provides several advantages:

· Low premiums when children are young and in good health

· Guaranteed future insurability

· Protection against possible health exclusions

· Additional savings for education, first home or other needs in the future

Of course, parents should ensure that their own insurance program is in place prior to considering insurance for their children. 





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Saskatoon, SK   S7K 0B2
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