Test Your
Knowledge
With Our
Tax Quiz

Many Canadian taxpayers complete their
own tax returns. in doing so they frequently
miss deductions or exemptions and as a
result pay more income tax than is
necessary. Test your knowledge of the tax
rules with the following quiz.

1. Your total income is ali from rental property and
totals $27,500. You can purchase an A.R.S.P. for
$5500 (20% of income) to reduce-income taxes.

{] True [) False

2. You gan $40,000 in wages and belong to a com-
pany pension plan where the company makes all
the contributions. You can purchase an R.A.S.P. for
a. $7500 .
b. $5500°
c. $3500 :
Answer

3. Your husband has been unemployed all of 1986
but has spent much of his time away from home
looking for work, and is not able to look after your
three children. His income for 1986 is only $4000.
You have had to wark and to do so, have had to

a pay child care expenses of $6,000, which yau are

allowed, {0 claim on your tax return,

{] True [} False .

4 You area single parent with two children, ages
11 and 14, You may claim
a. $710 for each child or
6. $710 for one child and $3,660 for the other
Answer
5. Your parents died when you were age 2, and
fram then until age 20 you were raised by a
neice? dour whom you called ‘Aunt Mary’, and who
was really mother to you for those years, Now, Aunt
Mary is 60 and has fallen on hard times. For the
past year she has lived with your family and been
“Supported by you. Unfortunately, she was not your
parent.so you cannot claim any deduction for her -
since ary such. claim must be for actual relatives.
[] True {] False”

6.-You are a® student at university and in May of ©
1986 yourmoved to Prince George for a summer
job, returning In September. Your Income during
the summer-was:$3000 and moving expanses to
Prince George were $1100. You may

-'b.-elaim one-hait as a‘tax deduction"
* ¢; clalm none’of it, since you ‘didn't really move
-* away, you were only absent for 4 months
_ Answer

7 Your'wite, age 63,-has income of $4000 — $2000 ~

from bank interest, ‘and $2000 from a provincial

i ¢ government pension. Since her income is below the ..

- favel where she"ls taxable, the $1000 ‘interest
deduction and the $1000 pension deduction, nor-

. mally allowed, is wasted and cannot be used.
{} True: [] False

8. You are “separated from your husband and rais-
- ing your two Caughters alone. The separation is not

7 -, ‘yet permanent and you. still hope. to get back

~~ together; in..any.event no formal separation ar-

“. rangements have been made or agreed upon. Your
( ‘husband’accepts his responsibilities and from his ”

’“galary: of-$1800 -per.month, pays you $800 per
:-fnonth towards.the support of your children: You
must add this * amount to your income for tax

: purposes,
0 True { ] False

9. You are a student at university and have receiv.
eda scholarship of 31200. You must add | to your
income. “
a. $1300 | b. $700 .c. Nit
Answer -

.. 10, You have “employment Income of $30,000 and
a lass" of $10,000 from a business which you
operated in 1986. You may
__ a. deduet the $10,000 business toss from your

‘” employment income
b. save your business toss to deduct against
future profits, it any, or
c. deduct % of the business loss
Answer

Answers —
“1: True; 2. 6; 3. False; 4,.b; 5. False, 6. cy
7. False; 8. False; 9. b; 10. a.

’ Scoring

i. Score So for each correct. answer. (Total 100).

90-100: You are probably taking full advantage of
the tax laws; 70-90: You may be losing money each
year; less than 70: you sh~uld have a professional
at Michael! Deane & Assoctates Ltd. prepare your

33 - Sunday, February 22, 1987 - North Shore News

S.P,'s — Investinents,
Not Just Tax Deferral

Signs advertising R.R.S.P.’s shout out from the windows of vir-
tually every financial institution in Vancouver at this time of year.
Instant Receipts! Best Rates in Town!

The messages. are
dramatic and urgent: Buy now
or you'll be too late.

But, according to the tax
experts at Michael Deane &
Associates, the messages are
also mis-leading.

North Vancouver's long-
established tax firm makes
the point that R.R.S:P.’s must
be seen first as an invest-
ment and then as a method of
tax deferral. Is an R.R.S.P.
earning 7 or 8 per cent in-
terest worthwhile, when, with
careful selection and good ad-
vice it is possible to make an
R.R.S.P. investment that, over
time, will earn 18% or more?

Even more important, is an

|.. R.R.S.P. a better investment
than © your. own
‘Perhaps,.say, the experts, pay-

- ing down the mortgage. on

home?

your home can ultimately
create greater tax savings

| than an R.RS.P.

Buying an R.R.S.P. without
understanding all the implica-
tions, depending on your level
of income, future prospects,
age, and many other factors,
may turn out to be a bad in-
vesitment. Remember, an
R.R.S.P. is, in most cir-

cumstances, only a deferral of

tax. However, if it is a good
investment, and purchased in
accordance with a financial
plan that is specially design-
ed to fit your circumstances,
it can turn out to create real
tax savings and provide for a
comfortable retirement as
well.

If you're confused about
R.R.S.P.’s and want to get the
fuii siory as to how they can
be used to benefit you, call
one of the professionals at
Michael Deane & Associates
Ltd. Their number is
987-3338.

fax Refund me
—Is it A Rip-Off?

Buying tax refunds from taxpayers who just can’t walt for their
money has become a big business over the past, few years..

it continues despite very |
strict regulations by the

.- Federal government, design- |
* ed-to reduce the amount that .
tax buying firms can charge:

for the service.

North Vancouver's Michael -
Deané & Associates has-
refused to enter the business ._--
of tax refund buying,.mainly.. ©
because they consider it un-: *”

fair to the client.

“Even with the limits im-

posed by the government as
to how much can be charg-

ed,” the officials at Michael. .
‘Deane & Associates point out,.

“a taxpayer ends up paying
adout 66% interest-on their

money. We believe that is a
- Tip Off.” .
“Besides”, the’ people: at:

Michael Deane point: out,

: ‘‘Reveriue Canada has vastly
improved the speed: with.

which they. send out refunds
~- so much so that the

average, fairly straightforward |

return gets a refund back in

“about six weeks.’". ;
The advice .of: Michael

“Deane -&. Associates? Get

your return done as early as

possible and in the mail. If it
is filed properly, and early,
you'll likely. get your refund
back in a few weeks and save
yourself the 66% interest.

Local firm
offer tax
preparation
and more!

Personal tax returns, which were
perhaps never simple, are even more
complicated in 1987. If you are finding
that to be the case, perhaps a wise deci-
sion would be to talk to the professional,
tax preparers at Michael Deane and
Associates Ltd., 1849 Lonsdale in North
Vancouver. (T elephone 987-3338).

Not only will they make some sense
from the confusion, they'll complete
your tax return efficiently and si low
cost, ensuring along the way that you
benefit as much as possible from the tax
laws. They can’t guarantee you a big-
ger refund, but they will undertake to en-
sure you pay the least amount of tax that
the law requires.

In addition to personal tax returns,

Michael Deane & Associates Ltd. can
also look after your needs in the area

- of Corporate tax returns, trust returns,

and if you require it they’ll set up a com-
puter accounting system designed just
for your business.

They've been around for many years

—- 19 years on the North Shore, and -

their many years of experience ensures
you of superior, year-round service.

Their unique experience in the
business of tax preparation also makes
it possible for them to provide you with
superb financial planning services;

designed to save you tax dollars and .
provide for much better management of ~
your assets. R.R.S.P.'s, guaranteed in- -

vestments, tax shelters, growth in-

~ vestments — they're all a part of what

you can expect from Michael Deane &
Associates Ltd.

What to bring

with you to
our office.

‘a To enable ‘the . tax. preparers . at p.
* .Michael Deane & Associates Ltd.” tO.

quickly and efficiently complete your. tax
return, bring along the following: -

{ ] T4 slips from employers .

{ ] family allowance slips

{ ] pension income slips

{ ] interest and investment income
slips

[ ] receipts for medical expenses

({ ] receipts for charitable donations

[

(

[

(student only)
receipts for union dues
R.R.S.P. receipts. .

]
] receipts for tuition fees
}
!
J

lf you have a rental property, : an-
automobile expense claim, claims for
child care expenses, moving expenses,

-professional, business or commission °

income, stop by the offices of Michael’
Deane & Associates Ltd. and they'll
outline for you the information required
to complete your 1986. Personal tax
return.

’

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