i } | | § ETERS SR = a. ee FINANCIAL STRATEGIES save thousands of tax dollars with basic planning ¥ ALWAYS like to ask tax and other financial advisers how they handle their own money. Do they really practise what they preach? Over several weeks, Elio Luongo, of Thorne Ernst & Whinney, chartered accountants, is providing readers of this column with more than three dozen ways to save income tax. _And he is also showing how or- pie can save or defer thousands of dollars in income tax in .a. single year with some reasonably basic tax planning. which strategy is best,’’ he said. “So it’s important to check that a tax planning technique is ap- propriate, and to get expert advice if you are not sure.”’ Review these tax tips. Mark the ones which could benefit you or somebody cise in your family. Then, because this is only a summary, do some research to get all the details. And do seek profes- dollars and sense Mike Grenby sional advice, especiaily if a large amouat of zaoney is involved. — - .© Use your income and savings to buy: personal-use items aad pay down non-deductible debt (home mortgage, car loans, credit cards). Then borrow to invest, so the interest could be tax deductible. Toe often, people take the op- ite approach: they use their Savings for investing, and borrow to buy furniture, a car, etc. ® If you are required to pay tax instalments (monthly or quarierly) - or if you owe tax, pay up prompt- ast Aprils budget added . nother two per cent to the interest rate formula, effective Oct. 1. So Revenue Canada will no longer de til. the relatively inexpensive lender it 3 of running a.small busineat you have tobe ah per - et everything ... from payrall to pro- ts, invaniory t0 exports, cash flow to promotion. *" Fact is, you can't ba an instant ‘expert in everything, and that's where CASE can help. Financial Services -; “clawed . back’’.. . parent’s income exceeds $50,000 used to be... Opén'an ‘account in your name “in trust for’’ your child(ren). . Deposit the family allowance _ cheques into this account. The in- ‘terest or dividends earned will be. considered the child’s for tax pure poses, not parent’s — even i sonie or. allof the baby bonus is because the However, the parent must still “ doclaré the family allowance pay- *' CASE provides personalized coungelling by successful, recred paopte who are knowledgeubla in your type of business. ACASE counselior can help you improve your business operation. quickly. — Term Loans tailored to the needs of your business ‘ += Do-it-yourself business planning packages to help you prepare your own proposal. ; Call us today: 666 76-221 Wast Espiansde Rath Vancouver, B.C. V7M 3S Fadazal Business Devetoament Bank i ACKING INDEPENDENT BUSINESS Banque fddérale de développeme~: Canada BusInNEss © Use savings to pay down the movstgage you took out to buy your principal residence. The interest on the mortgage is not deductible and is usually higher than the (fully taxable) in- terest you carn on your savings. Then set up a line of credit to replace that cash reserve. ®@ Make charitaSie donations in December rather than January. And consider making both this and next year’s donations in 1989. You get a tax credit of about 26 per cent on the rest. Contribute $500 in 1989 instead of $250 this year and $250 next year — and save $178 tax instead of $130. © The spouse (partner) in the higher tax bracket should Pay ail the bills and the person in the lower tax bracket should do all the saving/investing. Let’s say one Pa earns be- tween $5,500 and $27,800, and the ~ Wednesday, July 12, 1989 - North Shore News other miore than $55,600. On $10,000 of investment in- come, the approach just outlined will save almost $2,000 a year in tax, compared with taking the op- posite approach. © Higher-tax-bracket spouse should pay lower-tax-bracket spouse for guaranteeing higher’s business loan. Higher deducts the expense, . lower declares ihe income — par- ticulariy effective if one spouse is in the lowest tax bracket (as in the previous tax tip). o Higher-tax- bracket spouse . should pay iower-tax-bracket . spoure’s i “Honourable John Jansen ag