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HomeMy WebLinkAboutThe Huron Expositor, 1999-02-17, Page 8$-Ttirti HURON IXPOISiTOR. Iteeiruery 17. 19116 FINANCIAL ADVICE FINANCIAL PLANNING STRATEGIES FOR YOUR FUTLRE RRSP Borrowing Made Easy (NC) -As we inter the RRSP season, it seems that .:.we: all have good. intentions toward securing our ...financial future and - .enjoying the immediate tax benefits of making a solid • RRSP conirihution. But like so many people today. we usually have trouble. finding the money weneed to make that contribution. • .One option is an RRSP regular investment plan. where you designate a speci Ito amount of money Should I Incorporate My Business The thou Hiss)[ many small •-iu,.+nes'. iwners turn to this .iucst ion ,hr. r l'..ttter they ;tart their operations. There are many benefits and pttfalls'rhat should be - exaritined prior to Makin) .this decision.. These should he �samined-in light of each individual's personal - situation. There are several benetits.of Operating a ,business in the corporate structure: Firstly. the rate of taxation on corporate . income isiower and .can result in significant savings .:ver time. The combined federal And Ontario corporate Mcome taxrate is. -.approximately 22"- of business -income. This rate )t tax is much lower than . the personal tax rates . because: of our progressive rate system. The benefit :►f this lower tax rateis lost if the business does not zenerate more income than 'he 7usiness owner needs . r personal living expenses. A second advantage it the coricept of limited liability This can protect the personal assets of the shareholder from any unforeseen business•losses or lawsuits. however. the .. orporste-structure-does. not provide a shield form.all debts. and certainly all Assetsthat have accumulated in the 'corporation are at risk. The shareholder would 'likely have to sign a . • personal guarantee for any debt that the corporation •would take on.unless other security could be given. A third advantage forthe small business corporation is'the . access to th S500.000 capital as+ns deduction. Tile shares of the corporation can be soli and the gain on the sale up to $500.000 will be exempt from tax. - There are. also some disadvantages to consider. . Firstly. there are additional setup costs and'feesstto ____ maintain the corporation. The fees for filing the Articles of incorporation . with the government including lawyers' tees can cost between 51.000 and 52,000 depending on the complexity of the structure of the corporation. The ongoing fees include the preparation of annual financial statements, two sets of corporate income tax returns and minutes of annual meetings, which can cost S I.000 per year and up depending on the complexity of the business operations. A further disadvantage occurs if the business incurs losses in the first few years of operation; there is no opportunity for the shareholder to deduct these losses from other sources of personal income. - to be transferred every month from.your bank . account. directly to your RRSP. You'll avoid the last minute RRSP scramble, .plus. you'II .be putting your . money to work for you right away. earning sheltered income all year long. . • • • But.unless you had the foresight to set this -kind of plan last year. chances area you're now facing a last- minute scramble. The next -- best soluoon for Most people is an RRSP loan: - This type of loan is'a There are also pitfalls to the orporate structure in the . -_ planning of. your estate. The -business may own numerous assets that you would like to leave,equally to your . . - ,:hiidren. but thecorporation owns them and -since the corporation is a'sep_arate entity forth the owners these assets are not available to; ,distribute from the shareholder'; estate The .hares the corporation �an.he Divided between your htldren.' however. you -are forcing.ihe children_ittlo the: Joint Operation of your business. This problem can - be.especiallyrelevant fqr :. the operation of fanning •. corporations.- • •. • J There.are.man3. other 4i -tables and toals,to evaluate in -order to make this,decisionand ti is recommended that it be given careful consideration in consultation with your' lawyer. accountant and other. Professional advisors. ; Brian:E. Wightman. CGA simple way to get the allows ti'ou to forego your money you'need now to loan payments for a period make your contribution. file up. to 120 days while you your tax return and Ilse' ' wait tiir your tax refund. your tax refund to. help pay This year you can also down the loitn take advantage of • When borro'wingfor . your RRSP. Rob Paterson, general manager ot.retaii lending marketing at -CIBC government -regulations. •.suggests that. you should . there is now an opportunity-' maximizing your unused RRSP contribution room.. "With changes in .' forward the unused portion indefinitely". says Paterson.. • Borrowing and using your refund to pay off your loan . can help you -get started . toward taking full . advantage of,vour unused RRSP contributions: To find out more about •RRSP loans, contact your financial institution or be on the lookout for -t¢r many Canadians to reap CIBC at 1-K00 4b5-242 interest rates as low as tax benetits: If you have not CIBC prime''. Another: feature to ' maximized Our RRSP look for_when borrowing contributions in recent for an: RRSP loan, says Paterson. is h l 20 -day ` deferral option. This 'option Whatever your plans, we have plans to help! Rudy Jansen • Life Insurance • Personal Health�[nsurance • Financial Plantunne • Disability Income • Critical Illness Insurance 107-342 Erie Street Stratford ON N5A 2N4 (519)271-2041 • 'annuities and RRIFs.. • GICs and Savings Plans • Employee Benefits • RRSPs The Mutual Group_ .._ease; war Muruai L e of Canada eaa camoary,7f The kkat:,ai G-ouo. Brian E. Wightman Certified General Accountant 64 Main St., Seaforth (519)527-1331 Brian Wightman • Accounting & Bookkeeping • Personal ,& Corporate Tax • Farm, Business & Indvidual • Tax Planning (tall for .1 trey' t-onsultatiun at I11v office, your ht)fllC' Or bustll�'ti�. 527-1331 Please feel free to drop in to discuss: The Rules The. Tax advantage The investment: Registered Retirement Savings Plan Information Nights Date: Every Wednesday Night in February Time: 7:00 - 9:00 p.m Place: Edward Jones Office 79 Ontario Rd., Mitchell Me Joe Wait. • 79 Ontario Road, MacNeil, Ontario NOK 1NO (519)34$4673 EdwardiNamil S•rneg lairiieal lei amss hop://www.edeadprns.00m limber CIPF 9 years von can now carry TAX PLANNING... a long term process. The best accounting is 'a: 10 year plan, your accountant can look to the future and find ways to help you save. ; -' , Reasonable. Rates -Personal.Service -No advancelpayments ` -Registered Tax Consultant,. HURON TAX CONSULTING SERVICES • By appointment only MARRY DENHAA.IV •Few appointments left LAURIE BERGSMA 527-0557 DANCING WITH THE ELEPHANTS IT'S YOUR MONEY By PauI 4. Rocket Chairman. Regal Capital Planners Ltd. (This column rias been. written for Paul Rocxel . by Gary R. Robertson Prav,ncral.Manager for :Regal.Capital Planners Ltd.. 'New Brunswick). "Recognize' the financial elephants in. your • liteand invest wi+iely." The elephant is the argest land animal {n tie world. weighing in at more than six tons. Can you imagine waltzing around with an elephant that weighs in at over twelve thousand pounds? We could picture each of the many financial probiems we face - investing, taxation, and • perhaps tate economy . to that of waltzing around with this huge. elephant. Whatever financial problems you -lace in life might be viewed as . being a six-ton elephant. - We aN have financial opportunities or problems and it's up to each of us to handle them to the best of our ability. ' It's not uncommon to face problems at different times in our lives, and at different stages in the economy. Perhaps a young person is trying to figure out how he can save a little to invest for his retirement, a retired- person needs income and growth; and eventuaNy everyone requires estate protection; we all need to save taxes. To a young person, financial freedom al retirement looks like a huge elephant. What is he - or she -expected to know about investing, taxes, economy, timing? What about all the news, or noiss, we hear pn TV concerning markets? Should the young investor be expected to know everything? Seniors are concerned about the low interest rates, and they are concerned about markets, the daily news reports on Russia, China, Japan. the dollar. taxes, etc. Are these six-ton elephants to deal with? I believe solid mutual funds can help people deal with many of the financial elephants in life. Mutual funds will also protect you against what you night call "Pink Elephantsr You might have one of those Pink Elephants I REGAL CAPITAL ERS LTD. M inland Valley Financial Consultants Ltd. 463 Thrnberry St., Bruseds, ON NOG 1140 arouno you! .you Know •he- hot '+p that was supposed.to create .financial ;ndependence overnight that somehow :hanged from a -Hot Tip" 'o a 'Pink Elephant)" For nvestors holding .one of -these Pink Etepnants.maybe is time to look at the value of professional money manageiner-it through mutual funds to help build a financial program to -place in their portfolio. • • • - • 'Dancing with the Elephants" is -a way of saying 'There are market- drops, .and taxes" to pay, people have to prepare to try to pass money back to others prior to death, and Canadians have,to save for their future_ ." u Throughout your lifetime you'll have to learn -tot dance with these big elephants (taxes; savings, • investing, economies. inhentance). so that rev will not crush your financial well being. It's 'hat simple. You might ask. -Why have others been successful. financially?"Maybe they teamed now to use the financial elephants that entered their lives to their best advantage! - A good independent investment advisor is - going to • help you' overcome your problems that might appear too big, or help you defeat those that are fust around the corner. Elephants are huge; they are the argest land animals in the world, weighing in at more than six tons. One might conclude that's a of of body to feed, a major problem. but when a comes to all the problems you can face ad -an Investor. tax payer. consumer. etc. - you're dealing with more than lust one problem. . A good investment advisor is going to help you select the right tools, different types of mutual funds, segregated ,funds; perhaps .estate Protection ideas to protect your estate. etc...and, work with you, and those tools to your best financial interest. • Bus. (519) 887-2662 Res. (519) 347-2569 Susan Carter, C.LM. Pfnancial Consultant SONS OF OUR PRODUCTS AND S[RVICR* Top Paying (ICs, Tax Saving Strategies, AAitual Funds, Life 8 Ohabiaty insurance, RASPS, RRIFs slid RESPs (The above list represents only a few of the many !manua)services avalebte through your Regal Fineness, Comm/ 770e is No. 1235 in a series of evades that have been appearing tri newspapers and magazines across Canada for mora than 15 years. For Paul J. %cites book YVFIY.fNVEST flit MUTUAL BUNDS- :onfact vols tocol book store or Regal Cepnral Planners Ltd.. 'deplane 887-2662.