TFSA or corporate investing?
For incorporated business owners
While most working individuals save money through a combination of registered retirement and savings vehicles such as Registered Retirement Savings Plans (RRSP), Tax-Free Savings Accounts (TFSA), and defined contribution or benefit plans, incorporated business owners have an additional option — saving through their private corporations.
Hurry up and wait! It’s that time of year again…
We understand that many of our clients like to get their taxes done early and avoid that end of April chaos. We know that your accountants would like that too. However, CRA doesn’t make that possible for many of us. Why? Because the information needed to produce some tax slips isn't available until as late as March 31st. Remember, companies and funds must complete year end audits before they can provide the information to us and to you.
The majority of Richardson Wealth tax slips will be mailed to clients late February/early March. However, the deadline for T3 (Statement of Trust Income) and T5013 (Statement of Partnership Income) mailings is not until March 31. Also, if you had any sells, maturities or redemptions in your non-registered accounts, the Trading Disposition Summaries are not mailed until early April. This is to make sure that the summaries accurately capture any Return of Capital transactions.
So set your expectations accordingly, and when you get your Tax Slip Checklist from us, make sure you and your accountant wait for all the slips before filing your return. As always, feel free to contact us with any questions.
Market Ethos —
Valuations not as high as you think
There is no denying the U.S. equity market is expensive. Even based on consensus forward-earnings estimates, the S&P 500 trades at a lofty 23x. And this market is not expensive for a lack of earnings.
RRSP and TFSA reminders
The deadline to contribute to your RRSP for the 2020 tax year is March 1, 2021. The maximum contribution amount for 2020 is $27,230, or 18% of earned income in 2019, whichever is the lesser amount. Your Notice of Assessment from CRA will indicate if you have any additional contribution room.
The maximum contribution amount for 2021 is $27,830, or 18% of earned income in 2020, whichever is the lesser amount.
Your guide to 2020 income tax reporting
As you prepare to file your 2020 income tax return, this brochure will assist you in understanding the tax forms you will receive from Richardson Wealth and provide you with expected mailing dates for each form.