Archive for the ‘Taxes’ Category:
Deliberately Create Tax Free Money & Retire Sooner With More - Why RRSPs Fail Canadians
With gas and food prices climbing we start to feel the pinch in our wallet.
For many the RRSP strategy will be the only investment strategy that they will use their entire life.
With 80% of Canadians retiring financially challenged does it really make sense to be doing what the masses are doing when it come to money? Probably not. The challenge is, people don’t get educated, instead; they get sold too. My industry is largely the problem.
In his book: “The 10 Secrets Revenue Canada Doesn’t Want You To Know,” Author David Voth shares secret #8 with us: Create a Tax Shelter.
Actually, this isn’t a secret at all but a widely used strategy by many professionals and financial planners.
What does it do? Well, it can give you tax free income. Let’s compare it to the RRSP. When we retire and we take money our of our RRSP/RRIF it is fully taxable at our marginal tax bracket (no different than the paycheck you are getting right now.)! The government doesn’t care how old you are they tax it all the same.
With a personal investment tax shelter that has been set up correctly you can create the possibility of having tax free income. Meaning, if you were getting $100K from your RRSP today in income after tax you’d have about $53,000 to spend - exciting isn’t it? With a personal investment shelter you’d have $100K - I wonder why the government isn’t promoting this?
Are these tax shelters hard to set up? Not at all, it’s as easy as setting up an RRSP, you just need a financial Advisor who is Insurance Licensed.
What are the investments like? The investments are the same as your RRSP, for most it will be a mutual fund, and you can have the best available.
Tyler Hoffman, FMA
Vancouver’s Wealth Coach
Article Source: http://EzineArticles.com/?expert=Tyler_Hoffman
TurboTax Versus Your Accountant: Which is Better?
I practice public accounting in a Seattle suburb. Around this time of year, that means I get lots of calls from people who need a tax return prepared or some tax question answered.
One of the most common questions is, “Can I get by with something like TurboTax (from Intuit) or TaxCut (from H & R Block)?”
The Case for Tax Software
My usual recommendation? Most people can and should use a tax software program like TurboTax. The programs should be easy to use if you’ve got computer experience. Especially after the first year you use the software.
The programs are also really good at catching the usual errors. And they easily handle the most common tax questions or problems that the individual tax payer is likely to encounter.
What’s more, the price is right. Tax return preparation fees vary by region and the skill of the tax accountant. But just to give you an example, I charge close to $400 for a typical individual tax return.
In comparison, you can often find tax preparation software selling for between $25 and $50. That’s a huge savings compared to an accountant.
The Exceptions to the Rule You Should Use Tax Software
In a handful of special cases, tax software (in my opinion) isn’t as good a choice. Specifically, I recommend people spend the extra money on a good enrolled agent or certified public accountant in two situations:
Special Circumstance #1: You’ve got carry-forwards for things like capital losses, alternative minimum taxes, or passive suspended losses.
In each of these cases, to prepare this year’s tax return, you need to grab data from previous year’s tax returns. Accountants and professional tax software like your accountant uses track these carry-forward items extremely carefully.
In comparison, many tax payers don’t know which items need to be carried forward. TurboTax and TaxCut, by the way, do know. And as long as you keep using the same software on the same computer, you should be okay.
However, if you get a new computer and forget to transfer your tax files or if you bungle the file transfer, you could lose thousands of dollars of tax savings.
Special Circumstance #2: You’ve got more than one tax return to prepare. For example, you’ve got both a business tax return (like an S corporation, limited liability company or partnership return) to prepare and you’ve also got your individual tax return to prepare.
In this case, you should consider the business return when you prepare the individual return. And vice versa—you should consider the individual return when you prepare the business return.
As good as the tax software programs are, the programs can’t know as you’re preparing one tax return about the other returns you’ll need to prepare as well. And that lack of insight means the tax software can’t recommend tax accounting choices on one return that let you minimize the taxes you’ll pay on another return.
In comparison, a good accountant will consider your individual tax liability as he or she makes accounting choices on your business return. The accountant, for example, will consider your individual tax bill when depreciation methods are selected on the business return.
Seattle CPA Stephen L. Nelson has written more than 150 books, including the bestseller Quicken for Dummies. Formerly an adjunct tax professor at Golden Gate University, Nelson also edits the do-it-yourself limited liability company and s corporation web sites.
Article Source: http://EzineArticles.com/?expert=Stephen_Nelson