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Home My WebLink AboutThe Citizen, 2013-02-14, Page 6PAGE 6. THE CITIZEN, THURSDAY, FEBRUARY 14, 2013.When the nest is empty, control your spending Be aware of tax changes made this year NC –The Certified General Accountants of Ontario advise of a number of provincial tax changes for filers this year: Increased threshold for all income tax brackets • Taxable income thresholds in all three Ontario provincial tax brackets were increased by 3.3 per cent in 2012, reflecting changes to Canada’s consumer price index (CPI) in Ontario. All indexed non-refundable tax credits also increased by 3.3 per cent. New high income tax bracket • The Ontario government has introduced a new tax bracket. Beginning in 2012, individuals will be taxed at a rate of 12.16 per cent on that portion of their income in excess of $500,000 annually. That will increase to 13.16 per cent in 2013. • This is supposed to be a temporary tax bracket until Ontario’s deficit has been eliminated in several years. Ontario Trillium Benefit • Effective July 2012, the Ontario Trillium Benefit combines payments from the Ontario sales tax credit, Ontario energy and property tax credit, and Northern Ontario energy credit. Further details are available on page 117 in the chapter on Ontario Provincial Tax. Healthy homes renovation tax credit • In 2012, Ontario introduced a refundable Healthy Homes Renovation Tax Credit, which is designed to assist senior citizens with the cost of permanent home modifications required to improve accessibility or assist with mobility to and within their home. • This credit is calculated as 15 per cent on up to $10,000, or $1,500, to cover eligible annual expenses (wheelchair ramps, widening passage doors, hand rails in corridors), among other qualifying expenditures. • Couples who are living together may only claim up to $10,000 in qualifying expenses in total. Family members who live with an elderly relative may claim this expense on behalf of the household. Couples who live separately because of medical or other reasons may each claim up to $10,000. • For the 2012 tax year, eligible expenses will qualify for this credit if they were incurred between Oct. 1, 2011 and Dec. 31, 2012. In future years, expenses can only be incurred within the corresponding calendar year. Additional information regarding federal and provincial tax changes is available online at www.cga.ontario.org MS –When the nest is empty and the kids no longer need financial support, many men and women find themselves with some extra money in their budget. Fewer mouths to feed and no more college tuition bills can give parents a sense of financial freedom they may not have had since before starting their family. But that freedom can also lead to overspending, something that can put retirement in jeopardy if people are not careful. Though it’s understandable for men and women to splurge on a well-deserved getaway once the kids have finally left the house, it’s important for adults to ensure that such splurging does not become routine. The following are a few ways men and women with some newfound disposable income can avoid overspending and putting themselves in financial hot water as they get closer to retirement. • Pay with cash whenever possible. Swiping a debit card or credit card is certainly a convenient way to shop, but it can also be dangerous. Many people find it difficult to keep track of their spending when they use debit cards or credit cards to make their purchases. Using cash to make purchases, especially daily purchases like a morning cup of coffee, reduces the likelihood of overspending. This can help you get a better idea of how much money you’re spending and if there are any steps you can take to curtail that spending. An effective way to use cash is to withdraw money from the bank once per week and use that as your weekly supply of money. If you find yourself frequently running out of money each week, then you’re likely spending more than you should. • Keep a financial journal. Men and women who must adapt to having newfound disposable income may find it is not much different from younger men and women learning to manage their money when they first start working. Some of those lessons, like saving more than you spend, might need to be relearned. One way to get a grip on your spending is to keep a financial journal to track your daily and monthly expenses as well as larger purchases like a new television. Write down the monthly expenses you know you have each month, such as a mortgage payment or a car note, and each and every purchase you make, including how much you spend on dining out each month. Do this for at least a couple of months. When you have logged several months’ activity, examine your journal to see if there are any expenses that can be trimmed to save money. • Don’t go overboard rewarding yourself. Once your last child has left the nest, the temptation to reward yourself with a luxury item or two might prove overwhelming. After all, raising a family and paying for college tuition has no doubt required substantial sacrifice on your part, so it’s well within reason that you want to reward yourself after all these years. Avoid overdoing it so your finances aren’t stretched too thinly. A vacation with your spouse is reasonable, but buying a villa overseas might be a little over the top. Luxuries can be nice, but they can also drain a budget. Your monthly expenses once the kids have moved out should be lower, so if you find your cost of living has increased now that your nest is empty, you might be forced to determine which of your expenses are luxuries and which are necessities. • Take advantage of your “experience.” Though accepting a “senior” discount might be a blow to your pride, it also can be a boon to your bottom line. Many establishments, including gyms, restaurants and movie theatres, offer discounts to men and women age 55 and older. This can help you save a substantial amount of money over time, and no one has to know you’ve started cashing in on your experience. NC –Valuable tax preparation resources are available to communities across Ontario prepared by the Certified General Accountants of Ontario www.cga- ontario.org. Here are three tips pertaining supporting local farmers: • Tile drainage, clearing and leveling of farmland, as well as building an unpaved road, can be expensed in the year such payments are made or any portion carried forward to future years. However, land improvements on farmland 9 Rattenbury St. E., Clinton, ON N0M 1L0 Ph.: 519-482-9924 ~ 1-888-235-9260 Res.: 519-524-9260 Check out RRSP and RRIF plans designed to meet your needs. GIA, Mutual Funds, Seg. Funds Invest in your future today! RRSP DEADLINE: FEBRUARY 28, 2013 Have you ever considered planning your financial future? See Lawrence for a free consultation. Susan Alexander,CFP CLU CHS Doug Sholdice Phyllis Chisholm 472 Turnberry St. PO Box 69 Brussels, Ontario N0G 1H0 www.sholdicefinancial.com Phone: 519-887-2662 PEAK Investment Services Inc. Certified General Accountant • Personal & Corporate Tax • Accounting & Bookkeeping • Agricultural Services Seaforth 519-527-1331 Email: wightman@bellnet.ca Brian E. Wightman FINANCIAL 2013 Eye on the prize When the nest empties, it’s easy to want to splurge, but aging couples have to keep focus on their retirement and financial well-being. (MS photo) Agricultural taxes? Here are some tips Continued on page 7