42 ~ Wednesday, May 15, 1991 ~ North Shore News ‘Today’s agenda: THE ENVELOPES, please: He’s out to make $100,000 this year and wants to save tax. Just married at 50, she worries about her husband’s credit habits. A retired couple wants to preserve the children’s inheritance. And now for the answers... Michael Grenby DOLLARS AND SENSE “Em 26 and want to provide financial security and = in- dependence for my fiancee and children-to-be. So I've started a direct marketing business working full time out of my home and am on track to earn $100,000 in 1991. How do I save tax? Should | in- corporate? Where do | find more information about GST, ete.?"" - PL. The easiest way to save tax is to “think deductions."” Every time you spend money, ask yourself: ‘Is there any way this expense could help me earn income from my business?”’ Keep all receipts, with a note if the business purpose is unclear. Keep careful records, including a log book in your car to record all business mileage. Plan to split income to save tax — paying your fiancee/wife (if she’s in a lower tax bracket} and eventually your children to work in the business, Once you and your wife are in the top tax bracket and you have surplus funds, incorporation can help you save tax in various ways, For example, your company pays tax ata lower rate than you, leav- ing more money for investment. Most banks and major accoun- ting firms produce free fiterature on running a small business. Two of the best booklets I’ve seen come from the Roya! Bank's Your Business Matters series: Starting Out Rieht and The Source Book. Even if you aren’t a bank cus- tomer, you can get copies; the local branch can order them if it doesn't have any. Also ask Revenue Canada, Taxation, for its Business and Professional income Tax Guide, and Revenue Canada, Excise. for its GST Smail Business guides. Check your library or bookstore for titles like Home Inc., The Ca- nadian Home-Based Business Guide, by Douglas and Diana Gray (McGraw-Hill, $21.95). “My husband and 1, both in our 50s, have been married two years. He uses credit cards freely and insists on paying only the minimum each month. | always try to pay off the total. How can [ show him how much extra a $2,000 purchase on time really costs?"? - HM. A $2,000 purchase paid off at 22% over two years will add $490 or almost 25% to the purchase price, Some cards charge closer to 30%, which could cost you around $750 in interest over two years, if he won't change his ap- proach, try to pool resources to pay household and other joint ex- penses. Restrict his credit card habit to his own 2xpenses. Summer program set for kids THE PLYMOUTH Playcare Society is now accepting registra- tion for its summer program to be held between July and August. The program will run from Mondays to Fridays between 7:15 a.m, and 3:45 a.m. and the activi- ties include arts, crafts, sports, field trips and snacks will also be provided as part of the fee for the program. Parents wishing to enter their children into the program are en- couraged to register early. For more information contact the Plymouth Playcare Society. 919 Tolicross, North Vancouver at 929-6270 or Doris at 681-4365. PROVIDING ANNUITIES Including insured annuities plus a full range of redrement and life insurance products, To find out how insurance products can enhance your investment programs contact ScotiaMcLeod Financial Services for a complimentary brochure. 661-7442 2% Ea ScotiaNicLeod Ss q “You recently advised people to spend their non-RRSP funds first so their RRSPs will keep growing tax-free. We are retired and worry if we do that, the balance of ou RRSPs (or RRIFs) will be Cully taxed when we dig, leaving less for our children. So shoulda’t we spend our RRSPs first?" - D.C. You should always consider both your present and expected future tax brackets. Also, everybody needs to answer this question: Do you want to have more money to spend during retirement, er leave more to your children after you die? Let's say aver the years you can withdraw all sour RRSP/RRIF to our members. institution. @ PRE-PAYMENT FLEXIBILITY We make it possible to pay off your mort- ‘age sooner and save you thousands of oflars, Weekly, bi-weekly along with semi-monthly and monthly payment schedules are available to you. 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Se if you have enough pension and other income and want to leave the maximum estate, using up your RRSP/RRIF first could make sense if you are in the lowest tax bracket, tax savings and credit habits But if you want or need more money, then spending non-RRSP funds first while allowing your RRSPS/RRIFs to keep growing tax-free will) provide you with more money — as long as you won't be in a sharply higher tax bracket in the near future when you do receise your RRSP/ RRIF/annuily income. Mike Grenby is a Vancouver- based columnist and independent financial adviser who works with individuals: he will answer your questions as spice allows in his column — write to him ¢/o North Shore News, 1139 Lonsdale, North Vancouver, V7M 2H4. WELCOME TO OUR HOME NO MATTER WHAT YOUR OCCUPATION IS... mi RESIDENTIAL | MORTGAGE SALE YOO once van CLOSED MORTGAGE Gulf and Fraser Fishermen’s Credit Union offers flexible residential mortgage packages... 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