"Derald" was a foot taller than most baseball players our age, and a ferocious pitcher. Not scrawny like some of us 15 year-olds, he was beefy, with legs like a moose, and arms like hams. His fastball could sting the paw of the manliest of catchers, and it frightened most hitters to the outer edge of the batter's box.
I was a bit cocky, and when my turn at the plate arrived I stood in the centre of the box hoping to connect with one of his high velocity pitches.
Naturally, his first bullet was high and inside. I dodged and ducked, but it was flying at lightning speed, and hit me directly in the temple at the side of my helmet, knocking me flat on the ground. Arms and legs spread out, fast asleep.
I woke up with the umpire gently slapping my cheeks, bringing me to. This was long before we had learned to take concussions seriously. My only worries were run the bases and later to get back at the pitcher when it was my turn on the mound.
I don't recall my coach making any sort of fuss, but the umpire made me walk straightly along the first base line before allowing me to continue playing.
My fastball was never particularly impressive, but my curveball was another story.
In due course I struck the goon out, and when it was my turn again at the plate, I decided to switch things up to protect the bruised side of my head. I had worked at hitting left-handed in a recent practice and was pretty good at it. There was something more pure in my left-side swing, as if it were less ambitious, more inclined to behave as coached.
The beast delivered another blistering pitch, this time down around the knees, nearer the outside of the plate. I swung and sweet-spotted it, sending the ball smartly over the right fielder's head and where it bounced once in front of the short home run fence and into the blackberry brambles. A ground rule double and delicious revenge against the guy with hands the size of dinner plates and a head like a furry basketball.
We won the game, but I left with a thumper in my noggin.
Fortunately, we have come a long way in our understanding of head trauma since then, and it is very unlikely that this situation would be repeated today.
Tax headache?
Even after a successful year as an employee or business owner - especially after a successful year - we can avoid some skull-numbing trauma by understanding tax rules and working them to our benefit, well within the boundaries of law. These swings don't come naturally for most of us. It pays to take a few minutes (hours?) to study the options available to us and take advantage of them.
Year-end bonus planning
Receiving a bonus prior to year-end creates additional Registered Retirement Savings Plan (RRSP) deduction room for 2016 if you have not yet reached the maximum 2016 RRSP deduction limit.
Furthermore, receiving a bonus prior to year-end may also allow greater employee/employer pension and/or employee profit sharing plan contributions for 2016 if these contributions are based on the prior year's total compensation. However, if you will be receiving a year-end bonus, consider deferring the receipt of your bonus (if your employer permits) to early 2016 if you expect to be in a lower tax bracket next year.
If the bonus is paid directly to you there will be withholding taxes at source on the payment. However, if your employer permits, some or all of the withholding taxes can be avoided if it is transferred directly to your RRSP. (You must have adequate unused RRSP deduction room of course).
Note that if your bonus is deferred to 2016, the amount is deductible to your employer in the year it is declared if it is paid within 180 days of the corporation's year-end. The bonus is taxable to you as employment income in the year it is received.
Low-income year
If you expect to be in a lower marginal tax bracket in 2015 and expect to be in a much higher marginal tax bracket in retirement, then you may want to consider making an early withdrawal from your RRSP before year-end. In general, this strategy only makes sense for those individuals who are primarily growth investors outside their RRSP and are nearing retirement.
The advantage of this strategy is that you can avoid a higher tax rate on these RRSP funds if withdrawn in the future when your marginal tax rate may be higher. Furthermore, if the RRSP funds withdrawn are reinvested in a non-registered account, you can take advantage of the preferred income tax treatment on capital gains, Canadian dividends and return of capital. The drawback of this strategy is a prepayment of income tax and lost tax deferral on the growth of the RRSP funds withdrawn.
As always, this article is not meant as individualized tax or legal advice. Readers should consult their own professionals before proceeding with a strategy.
Mark Ryan is an advisor with RBC Wealth Management, Dominion Securities (member CIPF) and can be reached at Mark.Ryan@rbc.com.
