Tag Archives: Canada Revenue Agency

Don’t be fooled by CRA’s record of your TFSA contribution room

Several months after my husband and I filed our 2016 income tax returns and got our refunds, we received identical ominous envelopes from CRA.  They contained Notices of Assessment reporting that each of us had over-contributed $5,500/month for the last five months of the year, resulting in a $28,201 over-contribution to our TFSA accounts. Yet further down on the notices, it said the contributions to each of our accounts in 2016 totaled only $10,859.79.

Upon reviewing our bank statements, it appeared that one contribution of $5,500 was made in early March and a second amount was transferred into each TFSA in August 2016. When my husband checked our CRA accounts online mid-year, they said we still had $5,500 of contribution room in each account, so he made the second deposits in August.

However, upon calling CRA for clarification, we learned that unlike online banking records which are updated daily, CRA only receives information once a year by January 1st when financial institutions are required to report TFSA transactions for the prior calendar year. Therefore, because we made contributions after January 1, 2016, when we checked later in the year, they were not reflected in the total TFSA contribution room that could be viewed on CRA’s My Account feature.

The good news is that the total excess TFSA amount of $28,201.05 recorded in the first part of the Notice of Assessment was incorrect due to a programming error which totaled the overpayment at the end of each month instead of recording it as one amount of $5,500 for the balance of the year.

However, the bad news is that we had to withdraw $5,500 from each of our TFSA accounts and each pay $298.11 taxes and penalties. The tax payable for excess contributions to a tax-free savings account is 1% per month, for any month in which there is an excess amount at any time in the month.  This means there will be a tax payable even if the excess amount is withdrawn in the same month in which it is contributed.

While we could have appealed the penalties because the over contribution was due to a genuine misunderstanding, we decided to just pay the amounts and learn from our experience.

So the moral of the story is it is important to track TFSA contributions yourself. There is no deadline for contributions to a TFSA, as the unused contribution room is carried forward into the next year.  However, a withdrawal in any year does not increase the TFSA room until the following calendar year.  Thus, if you are thinking of making a withdrawal close to year end, make sure it is done by December 31st, in order to have the withdrawal amount added back to the TFSA room sooner.

The history of annual limits for each year is shown in the table below. The first year that contributions could be made was 2009.  At the current rate of inflation, the TFSA contribution limit will increase to $6,000 per year in 2019.

Years TFSA Annual Limit Cumulative Total
2009-2012 $5,000 $20,000
2013 $5,500 $25,500
2014 $5,500 $31,000
2015 $10,000 $41,000
2016 $5,500 $46,500
2017 $5,500 $52,000

 

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

What if your tax return is late?

By Sheryl Smolkin

You left filing your 2016 income tax return to the last minute and a huge project came up at work. You look at the calendar and suddenly realize you have missed the May 1st deadline. Or you have been working outside Canada for several years and didn’t file a return because you thought you didn’t have to.

What happens if your tax return is late and what can you do about it? Here’s what the Canada Revenue Agency has to say:

Interest
If you have a balance owing , CRA charges compound daily interest starting May 1, 2017, on any unpaid amounts owing for 2016. This includes any balance owing if they reassess your return. In addition, they will charge you interest on the penalties starting the day after your return is due.

The rate of interest charged can change every three months. For the first quarter of 2017 the interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums was 5%. However, if you overpaid your personal taxes, the interest rate paid to you is 3%. See Prescribed interest rates.

If you have amounts owing from previous years, CRA will continue to charge compound daily interest on those amounts. Payments you make are first applied to amounts owing from previous years.

Late-filing penalty
If you owe tax for 2016 and do not file your return for 2016 on time, CRA will charge you a late-filing penalty. The penalty is 5% of your 2016 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

If you were charged a late-filing penalty on your return for 2013, 2014, or 2015 your late-filing penalty for 2016 may be 10% of your 2016 balance owing, plus 2% of your 2016 balance owing for each full month your return is late, to a maximum of 20 months.

That’s why even if you cannot pay your full balance owing on or before April 30, 2017 you should have filed the return on time to avoid the late-filing penalty.

Repeated failure to report income penalty
If you failed to report an amount on your return for 2016 and you also failed to report an amount on your return for 2013, 2014, or 2015, you may have to pay a federal and provincial or territorial “repeated failure to report income penalty.” If you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income.

The federal and provincial or territorial penalties are each equal to the lesser of:

  • 10% of the amount you failed to report on your return for 2016; and
  • 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to note on your return.

However, if you voluntarily tell CRA about an amount you failed to report, they may waive these penalties. For more information, see Voluntary Disclosures Program.

False statements or omissions penalty
In addition, you may have to pay a penalty if you, knowingly or under circumstances amounting to gross negligence, have made a false statement or omission on your 2016 return.

The penalty is equal to the greater of:

  • $100; and
  • 50% of the understated tax and/or the overstated credits related to the false statement or omission.

However, if you voluntarily tell CRA about an amount you failed to report and/or credits you overstated, they may also waive this penalty.

Cancel or waive penalties or interest
The CRA administers legislation, commonly called the taxpayer relief provisions, that gives them the  discretion to cancel or waive penalties or interest when taxpayers are unable to meet their tax obligations due to circumstances beyond their control.

The CRA’s discretion to grant relief is limited to any period that ended within 10 calendar years before the year in which a request is made.

For penalties, the CRA will consider your request only if it relates to a tax year or fiscal period ending in any of the 10 calendar years before the year in which you make your request. For example, your request made in 2017 must relate to a penalty for a tax year or fiscal period ending in 2007 or later.

For interest on a balance owing for any tax year or fiscal period, the CRA will consider only the amounts that accrued during the 10 calendar years before the year in which you make your request. For example, your request made in 2017 must relate to interest that accrued in 2007 or later.

To make a request fill out Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest. For more information about relief from penalties or interest and how to submit your request, go to Taxpayer relief provisions.

Changes you need to know about on your 2016 Income Tax Return

By Sheryl Smolkin

If your financial affairs are fairly straightforward and the only income you receive is from employment, you should have already received all of your tax slips and you may have already filed your income tax return, although it is not due until midnight on Monday, May 1st.

But tax slips for mutual funds, flow-through shares, limited partnerships and income trusts only had to be sent out by March 31st, so if you have multiple, more complex sources of income you are likely among the group of Canadians who are under the gun this month to finalize and file your returns.

Here are some of the things that have changed since last year that individuals and families should be aware of when they are assembling documentation and preparing their returns.

GENERAL/ADMINISTRATIVE
MyCRA: A mobile app from the Canada Revenue Agency now allows you to view your notice of assessment, tax return status, benefit and credit information, and RRSP and TFSA contribution room.

Auto-fill: If you use electronic software to do your taxes, the CRA will fill in many of the boxes for you. You sign into CRA MyAccount and agree to a download that will include information on your RRSP contributions, plus information from T4s, T4As and T5s. Users are advised to double-check the CRA’s data before they file.

INDIVIDUALS AND FAMILIES
Canada child benefit (CCB): As of July 2016, the CCB has replaced the Canada child tax benefit (CCTB), the national child benefit supplement (NCBS), and the universal child care benefit (UCCB). For more information see Canada child benefit.

Child-care expenses: The amount parents can claim for child-care expenses has increased by $1,000 annually, per child, to $8,000 for a child under six and $5,000 for a child aged between seven and 16 years old. For more information see line 214.

Canada Apprentice Loan: Students in a designated Red Seal trade program can now claim interest on their government student loans. For more information see line 319.

Northern resident’s deductions: The basic and additional residency amounts used to calculate the northern residency deduction have both increased to $11 per day. See Form T2222, Northern Residents Deductions. For more information see line 255.

Children’s arts amount: The maximum eligible fees per child (excluding the supplement for children with disabilities), has been reduced to $250. Both will be eliminated for 2017 and later years. For more information see line 370.

Home accessibility expenses: You can claim a maximum of $10,000 for eligible expenses you incurred for work done or goods acquired for an eligible dwelling. This deduction typically applies to home renovations to improve accessibility for individuals eligible for the disability tax credit for the year or for qualifying seniors over 65. For more information see line 398.

Family tax cut: The Family Tax Cut allowed eligible couples with children under the age of 18 to notionally split the income of the spouse with higher earnings, transferring up to $50,000 of taxable income to the lower income spouse in a taxation year. The family tax cut has been eliminated for 2016 and later years.

Children’s fitness tax credit: The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $500. Both will be eliminated for 2017 and later tax years. For more information see lines 458 and 459.

Eligible educator school supply tax credit: If you were an eligible educator, you can claim up to $1,000 for eligible teaching supplies expenses. For more information see lines 468 and 469.

INTEREST AND INVESTMENTS
Tax-free savings account (TFSA): The amount that you can contribute to your TFSA  every year has been reduced to $5,500.

Dividend tax credit (DTC): The rate that applies to “other than eligible dividends” has changed for 2016 and later tax years. For more information see lines 120 and 425.

Labour-sponsored funds tax credit: The tax credit for the purchase of shares of provincially or territorially registered labour-sponsored venture capital corporations has been restored to 15% for 2016 and later tax years. The tax credit for the purchase of shares of federally registered labour-sponsored venture capital corporations has decreased to 5% and will be eliminated for 2017 and later tax years. For more information see lines 413, 414, 411, and 419.

What’s new on your 2016 tax return: Sale of a principal residence

By Sheryl Smolkin

For many Canadians, the family home is the most valuable asset they own and an important factor when they are planning their retirement. When you sell your principal residence, any increase in value is not subject to capital gains tax. However, if you sold your principal residence in the last year, there is a new form you will need to complete for the first time when you file your 2016 income tax return.

Your principal residence can be any of the following types of housing units:

  • A house
  • A cottage
  • A  condominium
  • An apartment in an apartment building
  • An apartment in a duplex, or
  • A trailer, mobile home, or houseboat.

For one of the above to qualify as a principal residence you must have owned it alone or jointly with another person. In addition, you, your current or former spouse or common-law partner, or any of your children must have lived in the home at some time during the year.

You are only allowed to designate one home as your principal residence for a particular year. If you are unable to designate your home as your principal residence for all the years you owned it, a portion of any gain on sale may be subject to tax as a capital gain. The portion of the gain subject to tax is based on a formula that takes into account the number of years you owned the home and the number of years it was designated as your principal residence.

The principal residence exemption calculation formula is:

The extra year in the top of the equation (the “one-plus rule”) means that when a person moves, both the old home and the new home will be treated as a principal residence in the year of the move, even though only one of them can actually be designated as such for that year.  However, for dispositions occurring after October 3, 2016, the “one-plus” factor applies only where the taxpayer is resident in Canada during the year in which they acquire the property.

In years prior to 2016, there was no need to report the sale on your tax return if the entire gain was eliminated.  However, on October 3, 2016 the federal government announced that, starting with the 2016 tax year, the sale of a principal residence must be reported on Schedule 3 of the tax return in order to claim the principal residence exemption.  This change applies also for deemed dispositions, such as a deemed disposition due to change in use of the property.

The purpose for the new reporting requirement is two-fold. The federal government wants to ensure that Canadian residents only claim the capital gains exemption for principal residences in appropriate circumstances. In addition, under the new rules, foreign buyers who were not residents at the time a home was bought will no longer be able to claim a principal residence exemption.

There are two other major changes to the Income Tax Act (ITA) regarding the reporting of the disposition of a principal residence:

  • Canada Revenue Agency (CRA) can, according to new ITA s. 152(4)(b.3), reassess a taxpayer outside of the normal reassessment period, if the taxpayer does not report a disposition.  Normally for individuals the reassessment period is three years from the date of the initial notice of assessment, with some exceptions.
  • If the disposition of the principal residence is not reported on the tax return as required, a late-filing penalty can be imposed @ $100 per month x the number of months late, to a maximum of $8,000.  New ITA s. 220(3.21) is added to this effect.

For a more in depth assessment of how changes to the principal residence exemption may impact you, contact your accountant or other tax advisor.

10 things you need to know about SPP

By Sheryl Smolkin

I have been writing about the Saskatchewan Pension Plan for six years and a member of the plan for just as long. I thought I knew everything there was to know about the plan, but every time I review the website I learn something new.

Here are 10 things about SPP that you may find interesting.

  1. The 30 year old plan is the 25th largest defined contribution plan in Canada (Benefits Canada 2016).
  2. The plan is funded by member contributions and investment earnings. As of December 31, 2016 there was $479.5 million in assets under management administered by a Board of Trustees, some of whom are also plan members.
  3. If you are between age 18 and 71 and have available Registered Retirement Savings Plan room you are eligible to join the 33,000 other members who are saving for their future, whether or not you live or work in Saskatchewan.
  4. With an annual maximum contribution of $2,500, the plan has several payment options designed to suit your budget.
  5. You can also transfer up to $10,000 per calendar year into your SPP account from your existing RRSP or Registered Retirement income Fund (RRIF).
  6. You have two investment options for your funds. The default fund is the Balanced Fund (BF) which is a low to moderate risk/return investment option. Approximately 55% of the fund is invested in equities, 35% in fixed income investments and 10% in a real estate pooled fund.
  7. The Short-term Fund (STF) is a low risk/low return investment option. Its primary purpose is to preserve capital. It is suitable for members who are near retirement and have reached their retirement savings goal, or members who wish to have a cash equivalent component in their investment portfolio.
  8. You may retire from SPP between the ages of 55 and 71 regardless of your employment status. You must apply for SPP retirement benefits; the package to make this application is available by calling SPP.
  9. If you name your spouse as beneficiary of your account, Canada Revenue Agency allows death benefits to be transferred, tax-deferred, directly to his or her SPP account or to an RRSP, RRIF, or guaranteed Life Annuity Contract (LAC).
  10. In addition to spousal rollover of SPP death benefits, rollovers to an RRSP or Registered Disability Savings Plan for a financially dependent infirm child or grandchild are permitted.

For more information about SPP see the website or call the office at 1-800-667-7153.

Top 10 year-end tax tips

By Sheryl Smolkin

If you earn income in Canada, you pay taxes. My father-in-law always said, “If you make money, pay what you owe, but not any more than you have to.” So to help you manage your 2016 tax bill, here are 10 top end-of-year tax tips he definitely would have approved of:

  1. Defer income: If you think you may earn less in 2017 than you have earned in 2016 and therefore be taxed at a lower rate, defer income where possible. This is less likely if you are employed and receive a regular wage or salary. However, your employer may agree to pay out a year-end bonus in January.  Also, if you are a consultant or freelancer consider wait until the beginning of 2017 to invoice certain clients.
  2. Contribute to SPP: SPP plan members with RRSP contribution room can contribute a maximum of $2,500/year. Contributions made until the end of February 2017 can be reported on your 2016 tax return, but the sooner you make your contribution the better.
  3. Max RRSP contributions: Your 2016 RRSP contribution limit is 18% of earned income you reported on your tax return in the previous year, up to a maximum of $25,370 minus any contributions to a company pension plan. However, unused RRSP contributions can be carried forward. Therefore if you have not maxed out your contributions every year, you may have thousands of dollars of contribution room. By using up this room you will trigger significant tax deductions when you file your 2016 tax return.
  4. Spousal RRSP: Where only one spouse is employed, opening a spousal RRSP will allow income splitting at retirement. Your permissible contributions to a spousal RRSP will depend on your available RRSP contribution room and you will get the tax deduction. Also, if your spouse withdraws funds within three calendar years of your contribution, it will be attributed to you.
  5. Max TFSA Contributions: As of this year, cumulative total TFSA contribution room is $46,500. Contributions are not tax-deductible, but investments accumulate tax-free and there are no tax consequences when money is withdrawn. Contribution room is also restored in the year following withdrawal. If you are holding cash or investments in an unregistered account and you have TFSA contribution room, consider moving as much as you can into your TFSA. However, keep in mind this will trigger a deemed disposition as of the date of transfer and you may have to pay any capital gains tax in the year of disposition
  6. Disability tax credit: Taxpayers who meet the criteria can apply for a non-refundable disability tax credit (DTC) of $8,001 in 2016. Where the disability has been in existence for some time, you can file retroactively for up to 10 years. However, the DTC requires Canada Revenue Agency (CRA) approval. Your doctor needs to complete a T2201 Disability Tax Credit Certificate for the CRA to review and approve, and you can only proceed once you have this approval.
  7. Get rid of losers: If you have an unregistered investment account, sell off investments with accrued losses at year end to offset capital gains realized in your portfolio.
  8. Charitable donations: You have until December 31st to make charitable donations that will generate a non-refundable tax credit on your 2016 tax return. You can typically claim eligible amounts of gifts to a limit of 75% of your net income. You can also claim any unclaimed donations made in the previous five years by you or your spouse or common law partner. You can find charitable donation tax credit rates for 2016 here. First-time donors who qualify can get an extra federal tax credit of 25%. For more information, see First-time donor’s super credit.
  9. Donate stock: There are plenty of ways to give to charity, but the donation of shares, whether publicly-traded or private company shares, can give rise to significant tax relief. Not only will you get a charitable donation tax credit but you will not have to pay capital gains tax on any appreciation in value since you purchased the shares.
  10. Medical/dental receipts: Make sure you have receipts for eligible medical expenses for you, your spouse or common-law partner, and dependent children under 18 that have not been otherwise reimbursed. They can be claimed on line 330 of the federal tax return. Only expenses in excess of the lesser of $2,237 for 2016 or 3% of net income can be claimed for the federal tax credit. Generally, you can claim all amounts paid, even if they were not paid in Canada.

Saskatchewan Pension Plan employees trust 30 years of simplicity and security

Seeing what the Saskatchewan Pension Plan has done for its members is giving Debbie Dand confidence about her own retirement.

“I usually talk to people who are inquiring about retiring,” said Dand, who works as a retirement officer for the plan.

“I educate them the best I can as to what their options are with the plan so they can make the best decision about what to do with their retirement savings.”

She discusses those options on the phone with members, knowing in detail what the plan has done over the last 30 years, first as a member and then, as an employee.

“Since 1986, when the plan started, it has accumulated an average return of 8.1 per cent less administration fees, so it has been a very good plan.”

It’s not just the return history that has benefited members.

“Saskatchewan Pension Plan has very low management fees at around one per cent, which is very low if you look around at some of our competitors,” said Dand.

“(The competitors) fees could be quite a bit higher. Over the years, it makes a quite a difference in what you are going to make in the long run.”

Now, after working for the Saskatchewan Pension Plan for the last 26 years, Dand is looking ahead to her own retirement.

“I myself have been a member of the plan right from 1986. The accounts have grown very nicely,” said Dand.

Her co-worker, Melody Lamont, sees the plan having a solid future capable of taking caring of members in retirement.

“For anybody that’s a member, they have the opportunity to receive an annuity if they remain with the Saskatchewan Pension Plan, guaranteed for the balance of their life,” said Lamont.

“So we’re offering the members something that’s very simple to work with. It’s a fit for anybody who’s interested in obtaining a wonderful pension plan.”

That’s why she encouraged her husband and daughter to join the plan while Dand says her husband and four children are also members.

Canadians between the ages of 18 and 71 with room to make RRSP contributions are eligible to become members. Your Notice of Assessment from Canada Revenue Agency will tell you what amount you are eligible to contribute each year. There is no minimum contribution amount and members have options about how they will make their contributions, including through online banking or directly from a bank account.

“I believe it’s something that’s there for the long term and that’s what’s very important for anyone who wants to look toward retirement and a good pension plan,” said Lamont.

Retirement savings: Are the kids alright?

By Sheryl Smolkin

A pair of surveys recently released by Tangerine Bank and TD Bank show that many millennials started saving for retirement in their early 20s, but they do not have a clear understanding of how much to save or how their RRSP savings can be used in future.

A new survey by Tangerine found that the younger generation of Canadians is getting the message to start saving early and build a nest egg for retirement. Despite being in the early stages of their career or still in school, the survey revealed that 62% of millennials (those 18-34) have started saving for retirement and almost half (46%) said they started before the age of 25.

These results are even more impressive when compared to data collected from the 81% of older working Canadians aged 35-65 who are currently saving for retirement. When asked when they began saving, only 18% reported to have started before the age of 25.

Of those 38% of millennials not yet saving for retirement, many (62%) say it’s because of their low salary or not having enough money, and another 23% said it’s because they are saving for a big ticket item like a house, a wedding, or travel.

Nevertheless across the different age groups, the survey’s findings were uniform when it comes to financial literacy. Fifty eight percent of both millennials and older working Canadians felt they did not learn enough about saving for retirement before they started.

This is consistent with the findings of a late 2015 Environics poll conducted for TD bank which found that many millennials are unaware that RRSP funds cannot be used for other items such as making a charitable donation (64%), paying childcare expenses (60%), financing a car (52%), making a personal loan (51%), renting an apartment or purchasing a second home (50%).

Half (50%) of all millennials surveyed by TD correctly identified that RRSP funds can be used for first time home purchase, although just 28% were aware they can be used to fund full-time education as a mature student.

“Saving enough money for a down payment on a home can be difficult for many younger Canadians, so the ability to withdraw up to $25,000 from an RRSP, or up to $50,000 for a couple, can help make it easier,” said Linda MacKay, Senior Vice President, Personal Savings and Investing at TD Canada Trust. “Building up an RRSP from the earliest possible moment not only helps you save on income tax now, but could also help get you into your first home more quickly and lower your monthly mortgage payments down the road.”

But Lee Bennett, Senior Vice President, TD Wealth Financial Planning says there are pros and cons and long-term implications of using RRSP funds to buy a home or pursue further education, including giving up the potential growth of RRSP savings until that money is repaid into the plan. As with any significant investment decision, she recommends investors consult with a financial planner who can help explain what’s best for each individual.

MacKay agrees, adding that it’s important to have a bit of know-how and understand clearly what an RRSP can – and cannot – be used for in order to avoid incurring tax penalties for improper withdrawals and to be able to maximize the amount of money that can be saved. She says this applies particularly to millennials who, as the TD survey shows, have many misconceptions about how an RRSP fund can be used.

You can find basic information on How RRSPs work and Making RRSP withdrawals before you retire on the Ontario Securities Commission’s web site GetSmarterAboutMoney.ca and a more comprehensive discussion from the Canada Revenue Agency at RRSPs and related plans.

May 4: Best from the blogosphere: Federal Budget Edition

By Sheryl Smolkin

FEDERAL BUDGET

Prime Minister Harper’s 2015 pre-election budget included several goodies for both people who are saving for retirement and seniors in the deccumulation phase. As you probably know by now, annual TFSA contributions have been increased from from $5,500 to $10,000/year and seniors will be permitted to withdraw money more slowly from their RRIFs so their savings will last longer.

If you are already a senior, you will be happy to know that Rob Carrick at the Globe and Mail characterized seniors as the runaway winners in the Budget. You got more elbow room to manage withdrawals from your RRIFs and a new tax credit to make your homes more accessible. Older Canadians are also major beneficiaries of the new $10,000 annual contribution limit for tax-free savings accounts and there is some financial help for people who look after gravely ill relatives

One of the sources of controversy after the budget was passed is whether it is safe to go ahead and top up your TFSA for 2016 before the budget is actually passed by Parliament. My take was that this is a majority government and there is no way the budget provisions will not become law. Jonathan Chevreau quoted me in Experts: go ahead and make that extra $4,500 TFSA contribution now: I just did.

And  since then Canada Revenue Agency has clarified the timeline of new TFSA limit. In a statement, they said:

“This proposed measure is subject to parliamentary approval. Consistent with its standard practice, the CRA is administering this measure on the basis of the budget announcement. Financial institutions may immediately allow existing and new account holders to contribute up to the proposed maximum.”

In a Maclean’s article, Stop pretending the TFSA expansion won’t be felt until 2080 Kevin Milligan notes that the most important feature of TFSAs is that room accumulates through time, starting at age 18. The annual limit started at $5,000 in 2009, moved to $5,500 in 2013, and the budget has now moved the limit to $10,000 from 2015 forward.

This means that 10 years from now in 2025, every Canadian who is age 34 or older will have full possible contribution room of $141,000. For a couple, that would be $282,000. The net result he believes is that very few people in the future will have any need to pay much tax on investment income as TFSAs will provide almost total coverage of assets.

Finally, Gordon Pape says in his Toronto Star column: RRIF withdrawal changes – it’s about time. His preference would have been for Ottawa to eliminate the minimum withdrawals entirely. After all, everything in an RRIF will eventually be taxed when the plan holder or the surviving spouse dies. The feds will get their share sooner or later — they always do. But he will take what he can get!

We will discuss the RRIF changes in more detail in a future blog on savewithspp.com.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.