Wednesday. November 28, 1990 - North Shore News - 74 BUSINESS Don’t wait till spring - save tax now! WHY WAIT ‘til spring? Save tax now — or at least act now so you will save tax in the spring. ft asked Elio Luongo, senior tax manager for Peat Marwick Thorne, chartered accountants, to summarize the strategies which save most people the most tax most often. This Ist will alert you to tax tips you should consider: you will probably need further expert advice on how these ideas apply to your situation. Several community TV stations are running a program during which I talk to Luongo about these and other tax-saving tips. You might call Shaw Cable to see if — and when — the program will be aired. © Registered retirement savings plans. The 1990 contribution rules are unchanged: 20 per cent of earned income — $7,500 max- imum, or if you belong to a regis- tered pension or deferred profit- sharing plan, $3,500 minus any contribution you make to the RPP or DPSP. (1) Your 199] RRSP contribu- tion (18 per cent of earned income to a maximum of $11,500) will be based on your 1990 income. So consider maximizing earned in- come for 1990. (2) Contribute early in the year instead of the following February to start earning tax-sheltered in- come as soon as possible. (3) Consider an RRSP contribu- tion rather than paying down debt especially if your taxable income is more than $28,000. (4) If you invest in good-growth shares for the long term, consider contributing some of your RRSP to trigger a capital gain so you can use your capital gains exemp- tion. (5) Contribute to a spousal RRSP if your spouse will be in a lower tax bracket than you when the funds are withdrawn, Between now and 1994 you may put an additional $6,000 a year of private (not CPP ar OAS) pensien in- come into a spousal RRSP, above the normal contribution limits. Watch the three-year attribution rule. {6) Transfer your retiring al- lowance/severance pay within al- lowable limits to your own RRSP. But beware the AMT (alternative minimum tax): see if splitting the payment between two years would eliminate the AMT. (7) Well before the end of the year in which you turn 71, decide whether an annuity, RRIF or combination of the two would be the best way to deregister your RRSP. © Registered education savings plan. Put up to $1,500 a year for up to 21 years into an RESP for each beneficiary (future student — needn’t be only a child). You don’t deduct your contribution, but the investment growth in the RESP is tax sheltered. Then the student declares this growth as income while attending a@ post-secondary institution full tirne, probably paying little or no tax. You lose the investment growth if the beneficiary doesn't go on to higher education. ¢ Income splitting. Because tax fates increase as your income in- creases, shifting income to tax- payers (usually family members) in a lower bracket saves tax. Two individuals with incomes of $30,000 each pay about $4,500 less tax a year compared with one individual having $60,000 income. (J) Lend or give money so a spouse or child can earn second Send a message of hope... UNICEF Cards. Available at: 439 West Hastings, Vancouver, 687-9096 Capilano Cornmunity College. Lanita's, Caulfeild Plateau Shopping, Participating Super Valu, Stong's, Safeway, Purdy's Chocolates, Central Guaranty Trusi. g Retirement Income Planning # Estate Planning Charitable Gift Planning Paul Milley “Advice is only as good as the person you ask...” ZLOTNIK, LAMB & COMPANY Lite Distance | Retirement broomes ; Eaployee Benetits 1200 Park Place, 666 Burrard Street Voc INS (BUA OSS-7IO8 Toll Free Line 1-800-063-3174 Vancouver, BoC Call us today for our Consumer's Guide to RRIF'’s and Annuities. Michael Grenby DOLLARS AND SENSE generation income. (The first gen- eration income is attributed back to the person providing the funds.) (2) Put family allowances into accounts for the children. The in- come earned will belong to the child for tax purposes. (3) Transfer assets that are ex- pected to increase in value to children. Interest and dividends will be attributed to the transferor Stock #5595A "86 Mercedes-Benz 560 SEL Black Pead/Burgundy leather. 78.000 kms. Local. All books & records. Stock #5593A "89 Mercedes-Benz 420 SEL Taupe/Cream leather. 8000 kms. Local. All books & records. Stock #PII3ZA °84 Mercedes-Benz 380 SL Signal Red/Black leather. Both tops. Ali books and records. Stock *5610A *B5 Mercedes-Benz 380 SE Astral Silver/Blue feather, sunroof. All books and records until the child is U8) but capital gains will be considered the child's for tax purposes. (4) Higher-income spouse should pay the bills Gneludinge lower-income spouse’s income tax — both quarterly and on Apri! 30). Lower-income spouse should do the investing. (5) Pay children's expenses so they can invest their own (earned or inherited) money. (6) Split CP benefits once both spouses ure 60 if one has higher benefits and is in a higher tax bracket than the other. * Employees. (1) Bargain for non-taxable benefits: pension plan contribu- tions by the employer, health, sickness o1 accident insurance plans, reimbursement of moving expenses, discounts, recreational facilities. QQ) you get a tax refund because you have deductions like early or monthly RRSP contribu- tions, alimony and investment losses, ask Revenue Canada to give your employer permission to withhold fess tax from each paycheque. (3) Restructure remuneration — perhaps taking less income but ABOUT THE ONLY THING AS VALUABLE AS TODAY’S MERCEDES-BENZ IS YESTERDAY’S MERCEDES-BENZ Stock 75067A °85 Mercedes-Benz 500 SEL Champagne/Cream leather. sunroof. All books and records. Stock #P1142A, *83 Mercedes-Benz 380 SEC Coupe. Silver/Black leather. 85,000 mi. All books & records. Mercedes-Benz Wh 1375 MARINE DRIVE, NORTH VANCOUVER 984-9351 receiving stock option, stock pur- chase or phantom stock plans. (4) Maximize business use of company car (for example, mak- ing business calls on the wat to and from work}, minimize per- sonal use and keep a log. * Self employed. (1) Pay salary or fees to lower- tax-bracket spouse or children for reasonable services. (2) Write off home expenses (subject to certain restrictions). . (3) Choose year-end to max- imize tax deferral to make use of losses. NEXT WEEK: Tax-saving tips for investors, plus deadlines to remember for everybody. Mike Grenby is a Vancouver- based columnist and independent personal financial adviser who will answer your questions as space allows in his column, Write to him c/o North Shore News, 1139 Lonsdale Ave., North Vancouver V7M 2H4. Stock #PII90A "a9 Mercedes-Benz 300 CE Coupe. Red/Black leather. 17,000 kms, Local. One-owner. Alt books. Stock #Ptl86A ‘87 Mercedes-Benz I90E 2.6 Taupe/Cream leather. local. All books & records. Stock #PI147 “88 Mercedes-Benz 300 E SilveriGrey leather. 46,000 kms. local. All books & records. Stock #Pite: ‘90 Mercedes-Benz 500 SL Roadster. Smoked Silver/Brown leather. 14.000 kms. All books & records.