Loading...
The Citizen, 2003-02-19, Page 17THE CITIZEN, WEDNESDAY, FEBRUARY 19, 2003. PAGE 17. j Financial2003 Is your business succeeding or suffocating? Is your business drowning in debt? Do you fear it is headed for financial heart failure, or slipping into a cash­ flow coma? The stifling halt to the nation’s free market system has forced many business owners to admit what they’ve been denying — their business is out of shape. “The economy has become the universal scapegoat for struggling businesses,” says Ronald K. Law, MD, cardiologist, businessman and author of The Body of Business: Is Your Business Fit? “But the economy did not bring on troubles. It forced businesses to admit the troubles they already had.” Once they own up to their current condition, then diagnose their everyday ailments, business owners can rescue their business and nurture it back to health. While he doesn’t hold the cure for the common cold, Dr. Law proves that any business can succeed in any economy. The first step is a business diagnosis. To diagnosis your business, visit www.BodyOfBusiness.com. How much can you contribute to RRSP? For the 2002 tax year, the maximum contribution to your Registered Retirement Savings Plan (RRSP) is 18 per cent of your earned income for 2001 or $13,500 - whichever is less. “That is the general rule for the determination of the maximum contribution,” explains chartered accountant Dave Sinclair. “However, this amount will be lower if you have any pension adjustment, and it will be higher if you have carried over unused RRSP contribution room from previous years.” To confirm your RRSP contribution limit for the 2002 tax year, check the tax assessment notice sent to you by the Canada Customs and Revenue Agency (CCRA) for the 2001 tax year. If you can’t find your assessment notice, you can check your 2002 RRSP contribution limit by visiting the CCRA’s T.I.P.S. Online Service at www. ccra-adrc.gc.ca or by phoning 1-800-267-6999. You will be asked to provide your social insurance number, your month and year of birth and the total income you reported on line 150 of your 2001 tax return. - Brought to you by the Institute of Chartered Accountants of Ontario RRSPs must be converted at age 69 Will you turn 69 in 2003? If so, you must wind up your Registered Retirement Savings Plan (RRSP) by the end of the year. “The law says that you must draw Consider a self-directed RRSP If you want your Registered Retirement Savings Plan (RRSP) to include a broader range of investments, you may want to consider a self-directed RRSP. “The range of investments available for a self-directed RRSP includes cash, Canada Savings Bonds, treasury bills, bonds, debentures, investment certificates, RRSP-eligible mutual fund Maximize foreign content of RRSP Under current rules, the foreign content can account for 30 per cent of the book value amount of all properties in your self-directed Registered Retirement Savings Plan (RRSP). “Maximizing foreign content in your RRSP can help lower your risk, because you reduce the chances of being affected by a market crisis or Over 69? Consider a spousal RRSP Are you over the age of 69 and therefore no longer permitted to contribute to your own Registered Retirement Savings Plan (RRSP)? If so, you may still be able to get a tax deduction by contributing to a spousal RRSP. “Even if you are over 69, you may still be able to deduct spousal RRSP contributions in the future if your spouse is younger than you are,” says chartered accountant Kathy Faber, an investment manager in Kitchener. “Your ability to deduct RRSP Cartier Partners Susan Alexander, cfp, c.i.m. financial services Murray Siddall, CLU 453 Turnberry St., Brussels, ON 519-887-2662 alexanders © cartierpartners.ca RRSPs, RESPs, **GICs, Mutual Funds *Life & Disability Insurance ' Life & Disability Insurance sold through Cartier Partners Insurance Agency " GICs sold through Maitland Valley Financial Consultants Ltd. on your retirement savings for income once you reach the end of the year in which you become 69,” explains chartered accountant Dave Sinclair, “This means you should investments, shares or warrants of companies listed on prescribed stock exchanges, shares of private companies (specific restrictions apply) and certain mortgages on real property,” says chartered accountant Joe Marchello of Toronto. Marchello says that self-directed RRSPs permit more control and investment flexibility, but cautions that this should be weighed against economic downturn in any single country or region - including Canada,” says chartered accountant Frangois Menard, an investment advisor in Ottawa. “Diversification is one of the golden rules of investing, so it’s a good idea to take advantage of the 30-per-cent limit.” Menard adds that maximizing contributions depends on whether you have earned income, not on your age,” explains Faber. “Age only disqualifies you from having your own RRSP So, if you have earned income, and your spouse is not yet 69, you can deduct your contributions to the spousal RRSP.” Contributions can be made to the spousal RRSP up to and including the year the spouse reaches the age of 69. - Brought to you by the Institute of Chartered Accountants of Ontario. convert your RRSP to a retirement income option, such as a Registered Retirement Income Fund (RRIF) or an annuity.” RRIFs are often described as the any service or administration fees, which are not tax deductible. “Fees for self-directed RRSPs can run up to several hundred dollars per year,” says Marchello. “For example, a $300 fee would cost you $561 in pre-tax income if you are in the highest tax bracket.” If you do decide on a self-directed RRSP, Marchello says it makes your foreign content also increases your potential for higher returns, because many of the leading world stock markets have produced higher returns than the Canadian market over the past 10 years. “Foreign markets also present access to some high-growth industries not available in Canada and to emefging markets and “mirror image” of RRSPs, says Sinclair. “Instead of contributing each year in order to save for retirement, you withdraw a portion of your investment each year to use sense to have only one, in order to save on fees. “Self-directed plans are useful if you want to have stocks, bonds and/or property in your RRSP,” he adds. “If you only have investment certificates and mutual funds, you probably don’t need a self-directed plan.” - Brought to you by the Institute of Chartered Accountants of Ontario. rapidly-growing companies in their infant stages,” Menard says. “However, while there are many benefits to global investing, there are some short-term risks.” Ask a chartered accountant for details. - Brought to you by the Institute of Chartered Accountants of Ontario for your retirement.” If you were born in 1934, make sure you don’t miss the Dec. 31, deadline to convert your RRSP. Ask a chartered accountant for details. - Brought to you by the Institute of Chartered Accountants of Ontario. farm, business, or personal complete year-round service including tax audit representation • E-Fileavailable _ INCOMES |h$ TAX ^SERVICE Over 20 years experience Quality work at reasonable rates TREE CONSULTATION"I Stephen Thompson R. R. #2, Clinton