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Home My WebLink AboutThe Citizen, 2009-02-12, Page 12PAGE 12. THE CITIZEN, THURSDAY, FEBRUARY 12, 2009. By Keith Damsell (NC) It’s time to re-think the piggy bank. Educating your children about money is a great way to give them a head start in life. “Parents can’t go wrong teaching smart money habits to their children,”said Dennis Tew, father of two and a chief financial officer at an investments company. “Mom and Dad can play a critical role in shaping their children’s attitudes towards money. It’s an essential skill they will appreciate their entire life.” Some money tips: • Allowance. Encourage your child to divide their allowance: one-third for spending, one-third for saving and one-third for charitable causes. Review charities that may appeal to your child. As a savings incentive, match the amount your child is able to save. • Banking.Make a trip to the bank or credit union and open a savings account. Let your child fill out the deposit slip and explain how the bank will pay interest. It’s a great way to introduce the importance of saving. • Shopping.The grocery store is often a child’s first spending experience. Review the grocery list and how to plan purchases. In-store price comparisons are a great means to demonstrate value, quality and other consumer concerns. Encourage your child to review flyers and search for coupons for items you regularly purchase. • Credit cards.When using a credit card at a restaurant, explain to your child how the card works and how to calculate a tip. When your statement arrives in the mail, have your child verify the charges. • Investing.Review your child’s Registered Education Savings Plan statement with them and explain how the investments are performing. It’s an excellent tool to help your child learn the importance of long-term financial planning. By Sarah Kingdon (NC)-Whether newlyweds or married 25 years, couples are concerned about money. Why not increase your savings and reduce your tax bill by contributing to a spousal RRSP? Start contributing immediately “If one spouse earns a higher income than the other, they can contribute to an RRSP in their spouse’s name, providing that there is contribution room,”said Stephen Reichenfeld, a vice president of a national trust company. “The higher-earner’s taxable income will be reduced by the contribution amount, leading to significant tax savings.” RRSP contributions must remain invested for the year in which they were made and two years following. If not, the contributor will be taxed on the withdrawal. Save tax as a couple during retirement Ultimately, the goal of a spousal RRSP is to balance the couple’s individual annual income in retirement, keeping both in the lowest tax bracket possible. When a withdrawal from the spousal RRSP occurs either before or during retirement, the lower-income spouse will be taxed rather than the contributor. Don’t worry if it’s not forever No one likes to think their nuptials will end in divorce. But some marriages do not last until “death do us part.” This prospect should not prevent you and your spouse from planning for retirement and taking full advantage of tax-saving opportunities. “If a marriage ends and a spousal RRSP needs to be cashed out, the contributor will not necessarily be taxed, as long as proof of separation or divorce is provided,”said Mr. Reichenfeld. “Rather, the spouse who makes the withdrawal will be taxed on the amount.” Speak to your investment advisor about spousal RRSPs and other ways you can reduce tax. Saying ‘I Do’ to spousal RRSPs Time here to rethink the piggy bank (NC) Did you know you can begin investing in a Tax-Free Savings Account (TFSA)? The Government of Canada announced the new program in the 2008 federal budget. This new savings vehicle gives Canadian residents 18 or older access to an exciting new tax-free investment vehicle to help them reach their financial goals that much faster. Canadians can invest up to $5,000 a year in a TFSA without being taxed on their TFSA investment income or withdrawals from their accounts. Equally exciting is that investment income, or capital gains, earned in a TFSA are not subject to taxes. The Canada Revenue Agency has the information you need to know about the TFSA on its Web site at www.cra.gc.ca/tfsa. Financial Ready for some Positive Financial News? ELLIOTT NIXON INSURANCE BROKERS INC. See how your neighbours are saving thousands of dollars and maintaining their lifestyle in trying times. Learn to keep more of your hard-earned money in your pocket and to prosper in 2009! “Our 17-year mortgage will now be paid off in 8.5 years with a savings of over $85,000 of interest” — Chris J. Elliott Nixon Insurance Brokers Inc. presents guest speaker: Daryl Hemingway BSC, MSC CEO, Canada First Financial Personal Financial Solutions Blyth Memorial Hall Thursday, February 12 at 7:00 p.m. Limited seating is available so please RSVP to Elliott Nixon Insurance Brokers Inc. at 519-523-4481 or Darren.Stevenson@himginsurance.com One Stop Bookkeeping & Income Tax Services Glenda Morrison, CIM Personal Tax Return Preparation & Bookkeeping Services New clients always welcome 81 Alfred St., Brussels 519-887-8642 E-Filing Available E-Filing Available Reasonable Rates INCOME TAX SERVICE $$ • farm, business, or personal • complete year-round service including tax audit representation • E-File available Over 20 years' experience Quality work at reasonable rates "FREE CONSULTATION" Stephen Thompson R.R. #2, Clinton Home # 519-482-3244 Cell # 519-524-0957 Jeff Bloemberg IFA 152 Josephine St., Box 849 Wingham, ON N0G 2W0 Tel: 519-357-4554 Toll Free: 1-888-349-4447 Fax 519-357-2879 Email: steward.jeff@bellnet.ca Appointments available Saturdays for the RRSP season and the whole year long. Call to set up your appointment today!! TAX FREE SAVINGS ACCOUNTS Are they for you? We have the answer. We can also assist you with RRSPs March 2nd deadline RRIFs Special rules this year RESPs (plus 20% grant money) GICs Top rates from Severance & Pension Questions Tax and Estate Planning • Gather all your income tax information, including your information slips and receipts. • Review the list of restrictions at www.netfile.gc.ca to ensure you are eligible to use NETFILE. • Ensure you have your NETFILE access code (found on the information sheet of your T1 income tax return package or get it on- line at the NETFILE Web address). • Go to the NETFILE software page at www.netfile.gc.ca and select the NETFILE-certified tax preparation software you wish to use for your income tax return. • Save your return. Ensure you follow instructions to save your return for NETFILE, which will create a “.tax” file. • If you prepare a joint return with your spouse or common-law partner using NETFILE, save two separate “.tax” files one for each individual. • If you need to change your address or information for direct deposit, make sure you do so with the My Account service at www.cra.gc.ca/myaccount prior to filing your return using NETFILE. • Go to www.netfile.gc.ca. • Click “Ready to File” or “File Now.” • Read and agree to the terms and conditions. • Enter your social insurance number, date of birth, and NETFILE access code. • Attach your “.tax” file. • If you are expecting a refund, have no balance due, or do not want your payment reflected on your notice of assessment, you should skip step three. • If you have a balance due, step three is not mandatory, but if you plan on making a payment within five days of filing your return using NETFILE and want your notice of assessment to include your payment, indicate this in the box found in step three. Note that by doing so, your notice of assessment will be delayed until the CRA receives your payment. • If you have a balance due, note that you cannot make your payment with NETFILE. Ensure any balance due is paid by April 30. • Read the information and select “I agree. File my return now!” If all is correct, within two seconds you will receive a confirmation number and message. • Should you receive an error message, it means that your return was not accepted and you must follow the instructions in the message to correct the information. • Once you receive your confirmation number, you have completed the process. Checklist for filing your tax return using NETFILE Begin investing in TFSA