Time to talk tax

With the RRSP contribution deadline well behind us, Canadians are now facing the April 30 deadline for filing their personal income taxes. With several weeks left before the deadline, it might be a good time to call your clients in to discuss tax planning.

Not sure where to start? Here are a few ideas to get the conversation rolling:

Beware of tax protester schemes As tax filing season approaches, be mindful of this quote when consulting clients, and be careful of the context in which it is used—particularly when fielding questions about tax protester schemes.

No sympathy Cases of late T1135 forms are back in the news. This past fall saw the release of six Federal Court of Appeal decisions, involving the Asper Group of companies and their ongoing tiff with the Canada Revenue Agency over egregious penalties charged for the late filing of Form T1135, the “Foreign Income Verification Statement.”

Beware those missing tax slips Tax slips—whether T4s for employment income, T3s for trust distributions or T5s for investment income—are the CRA’s way of ensuring taxpayers don’t forget to report all their income under Canada’s self-assessment tax system.

Tax strategies for the HNW family No two family scenarios are the same, and this is especially true when it comes to clients with significant sources of wealth.

Tax savings for the retiree Your client just finished his or her last day of work and tomorrow begins the new adventure of planning out the retirement years. He or she is now thinking about winter vacations, golf-course memberships, summer trips with grandchildren and possibly even a winter home down south.

FOREIGN TAX RISKS

Watch the taxes on foreign investments When clients receive their T3 and T5 slips, be prepared to have an open and knowledgeable conversation with them should they ask why they are being asked to pay tax on the various income and/or capital gains amounts they’ve reported.

International income isn’t always tax-free It’s common these days for nearly every financial advisor to have at least one client with a foreign connection. That could mean a client with a foreign parent living overseas or a child living in the United States. It could also be a client who has previously lived in Europe and then immigrated to Canada, but still has financial ties with the foreign jurisdiction.

Does your client have U.S. tax risk? If you work with dual citizens of Canada and the United States, it’s important to be aware of the unique financial, tax and estate planning issues these clients face. Given the recent tax changes in the United States, these clients and their advisors will need to be ahead of the curve.

Snowbirding in the U.S. While we brave the cold in Canada, many of our clients spend the better part of winter in warmer climes. These annual Canadian sojourns down south should not exceed four months (122 days per year to be exact) as mandated by U.S. tax regulations.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.