Canada -- a great place to retire!

Canada Day is our annual opportunity to proudly celebrate Canada’s history and heritage and our achievements as a nation. On that happy holiday, many of us will likely pause for a moment to consider why living in Canada and being a Canadian is so great. Each of us will have our own reasons and, of course, there will be many we all share. One shared reason you may consider -

Canada is a great place to retire!

Maybe that’s because a comfortable retirement is something we take for granted but when you look at the many benefits available to Canadian retirees – benefits not available to retirees in many other countries – it’s clear we have much to celebrate.

 All wage earning and self-employed Canadians are eligible to receive either Canada Pension Plan or the Québec Pension Plan (CPP/QPP) retirement benefits, which are indexed for inflation. There are also CPP/QPP survivor and dependents’ benefits as well as a lump sum death benefit. A couple can choose to share CPP/QPP benefits for tax purposes.

 Canadians can take advantage of the tax-deferred, compound growth benefits of Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs). Any Canadian resident who receives periodic payments from a registered pension plan can potentially reduce their taxes by splitting pension income with a spouse/common-law partner. Those over age 65 who receive RRIF income are also eligible for the federal and provincial Pension Income Credit and can allocate up to 50% of their RRIF income to a spouse for tax purposes.

 Those who have lived in Canada for at least 40 years after age 18 will receive the full monthly Old Age Security (OAS) benefit, which is indexed for inflation. Canadian residents who have lived in Canada for at least 10 years after age 18 will receive a prorated OAS monthly payment.

 Seniors with a lower income may be eligible for the Guaranteed Income Supplement (GIS), a tax-free monthly payment, which is indexed for inflation.

 Canadians can invest in Tax-free Savings Accounts (TFSAs) that generate tax-free investment income that does not affect income-tested federal benefits.

 Every tax-eligible Canadian gets the Basic Personal Tax Credit and those over age 65 also receive an Age Credit. Other tax credits that can benefit retirees include the Medical

Expense Credit, the Dependent Credit, the Disability Credit, and the Caregivers Credit. There are also generous tax credits for those making charitable donations.

 And, of course, Canadian retirees have access to a wide range of health care services at little or no direct cost.

Yes, Canada is a great place to retire! But to make your retirement all it can be, you need a plan that includes retirement income from other sources such as your company or personal pension plan and your own investments. Your professional advisor can help make sure your first day of retirement is as much a cause for celebration as the first day of July.

John Scholl CLU,CGA, B. Mathematics,

Consultant - Investors Group Financial Services Inc.

& Investors Group Insurances Services Inc.

Are you self employed?

Self-employed? You are different when it comes to tax deadlines and rules

As a self-employed person, there are key differences in when and how you should pay your taxes – and knowing those differences can bring some significant tax savings. Here is what you need to know.

Tax deadlines

 Most Canadians must file their personal tax return by April 30 -- yours is due on June 15.

Tax owing on the personal tax return must be paid by the April 30 deadline. If the return is not filed by June 15, interest and penalties will apply.

 Generally, if you qualify as ‘self-employed’ for tax purposes, you are required to pay taxes in instalments based on your reported income in the previous taxation year. The

Canada Revenue Agency (CRA) will send you a notice with the amounts you have to pay. Instalment payments for 2010 are due March 15, June 15, September 15, and

December 15. If you don’t pay by the due dates, you may face instalment interest and penalties. You can pay by selecting one of three methods:

1. The schedule set out in the instalment payment notice you will receive from the Canada Revenue Agency (CRA).
2. Last year’s tax payable.
3. The estimated tax payable for the current year.

Tax tips

You may qualify for these deductions:

 Home office – if you use your home office as your principal place of business, you may be able to claim a portion of your housing costs including rent (if you are a tenant), mortgage interest, property taxes, utilities and home insurance.

 Capital assets – the furniture and equipment acquired for your business can be written off gradually by claiming the capital cost allowance (CCA) each year.

 Business expenses – claim reasonable expenses related to earning your income.

 Goods and Services Tax/Harmonized Sales Tax – if you charge these taxes to your clients/customers and remit them to the Canada Revenue Agency, you’re entitled to

GST/HST refund on business purchases.

 Health and/or Dental Insurance Premiums – these may be deductible for you and your family and deducting them as a business expense usually delivers a better tax benefit

than claiming them as a medical expense. The reimbursement of medical and dental expenses would still be received tax-free!

New: Employment Insurance (EI) benefits

 Beginning in January 2011, self-employed Canadians have the option to access EI benefits in four categories – maternity, parental, sickness and compassionate care benefits. Twelve months of EI premiums must be made in order to qualify for any benefits but for the first year, if contributions start by April 2010, payments can start January 2011. Remember once in the program, premiums are required for life. The choice to participate in the EI program depends on your personal circumstances.

There are many other tax savings strategies available to self-employed persons. Your professional advisor can help you identify the ones that will work best for you – and make sure you save on interest and penalties by hitting all your tax deadlines.

John Scholl CLU,CGA, B. Mathematics,

Consultant - Investors Group Financial Services Inc. & Investors Group Insurances Services Inc.