Family financial circumstances did not allow me to play organized hockey until I was eleven or twelve years old. But even then I could never satiate my passion for ice time. On rare occasions when Vancouver area temperatures fell below freezing, we would lace up the blades and grab a stick and some pucks and head out for a few hours of free shinny.
My brother played for a Junior B team, the Grandview Steelers, and trying to keep up with him, (or away from him), was always humiliating for my weaker, younger legs. After New Years Eve, 1975, I followed him out the front door at around 1:00 am, skates and sticks in hand. Guy Lombardo's annual event had come and gone in the several time zones which span the continent. We had Hoovered down the last of the cheese, crackers, and smoked oysters. The dog was asleep.
It was a cold, crisp, brightly moonlit night, with a surreal sense of winter stillness. There were no real lakes within reasonable walking distance, so we found our way to what amounted to a frozen urban swamp and laced up under the lesser light in the sky.
Scrubby bush and rocks poked up through the ice, making our precious sharpened blades susceptible to damage, but the elder Ryan was not deterred. He never was. "Skate hard," he demanded. "The rocks are the other team, and the bushes are the fans. Don't be such a baby! Stickhandle. Go! Go! Go!"
At nearly 2:30 am, we hobbled home, my toes throbbing, trying to freeze but only managing to hurt. It wasn't just the cold that pained me. I had a few choice bruises from the experience. Always trying to hone his skill set, he instructed me to skate patterns around the dimly-lit pond while he aimed snap shots at my feet. It was motivation for speed to be sure, but I my evasive manoeuvres were not always sufficient to the task.
Unlike flying hockey pucks, we do NOT evade taxes. Avoid, yes. Take advantage of every honest, legal and able-to-withstand-the-light-of-day method of reducing tax, absolutely.
2013 Year-end Tax and Investment Advice
Part 5 of 4 (because when it comes to taxes, we always seem to get more).
A few more random tidbits for this (truly) last installment:
Moving Within Canada
Individuals are subject to provincial taxes based on their province of residence on December 31st. Since marginal tax rates vary from province to province (e.g., the top combined federal and provincial tax rate in Alberta is 39% and the top rate in Nova Scotia is 50%), if you are moving to a province with a lower tax rate, you may consider moving prior to year-end. If you are moving to a province with higher tax rates, you may consider delaying your permanent move until early 2014.
Other Considerations
You should remember to pay all investment management fees, tuition fees, accounting and legal fees if deductible, childcare expenses, alimony, and any medical expenses by year-end if the intent is to claim them on your 2013 tax return.
Business Owners
Individual Pension Plan
As a shareholder and an employee of your business, you have the option of considering an Individual Pension Plan (IPP) as a method of saving for retirement. An IPP is a registered defined benefit pension plan, similar to many large company sponsored plans, except it is established and sponsored by your company and designed for you as the only member. IPPs generally have only one plan member except certain family members may also participate if they are employees of the company.
In order to establish a plan you must receive employment income from your company which is reported on a T4 by the company as a salary and/or annual bonus. An IPP is most suitable for those who have significant T4 income and are at least forty years of age.
If your company is incorporated and you are looking for both year-end corporate income tax deductions and a structured retirement savings plan for yourself, consider establishing an Individual Pension Plan (IPP).
Pay Yourself Before Year-End
If you operate your own business then consider paying salaries to yourself and family members before year-end. This year-end payment will give the family member earned income so they can make an RRSP contribution the following year and will give your business a tax deduction in the current year. Note that the salary paid must be reasonable and based on the services performed by the family member for the business (e.g. in light of what you might have had to pay someone who isn't related to you).
Purchasing Assets For Your Business
If you intend on purchasing assets for your business (i.e., computer, furniture, equipment, etc.), you should consider making this purchase before year-end. If the asset is available for use, this year-end purchase will allow the business to claim depreciation on the asset for tax purposes. However, generally only half of the regular allowable depreciation can be claimed for tax purposes in the first year of an asset purchase.
Mark Ryan is an advisor in Prince George with RBC Wealth Management, Dominion Securities, and can be reached at [email protected].
