𝑶𝒖𝒓 4𝒕𝒉 𝒑𝒐𝒊𝒏𝒕 𝒐𝒇 𝒕𝒉𝒆 𝒔𝒆𝒓𝒊𝒆𝒔 𝒊𝒔 𝑺𝒑𝒆𝒄𝒊𝒂𝒍 𝑪𝒐𝒏𝒔𝒊𝒅𝒆𝒓𝒂𝒕𝒊𝒐𝒏𝒔.
Special Considerations almost virtually cannot be executed without planning discussions with your accountant.
Again this is what makes our relationship special with our full financial planning clients as we are aware of the upcoming planning events.
We will focus on four ideas that are Special Considerations.
We could come up with several points here but this gives you an idea of the general topic and I think it gets the point across.
𝙒𝙝𝙚𝙣 𝙩𝙤 𝙖𝙥𝙥𝙡𝙮 𝙛𝙤𝙧 𝙊𝘼𝙎.
When you are age 64 this is a key year for making OAS decisions.
This is a special circumstance that should be noted after your tax filing and what to be doing with your OAS based on your income. Your accountant is going to understand your tax situation better an anyone or is it your planner that is advising.
To be very frank, most accounting firms will defer this type of planning to someone else. They will file but are they helping you plan?
This is again what makes us special is that we are the Planning team that does the tax filing, financial planning and so we can collaborate together.
If you are about to begin OAS because you are 65 but your prior income is higher than what you will receive in the year you are 65 there needs to be some planning involved.
You either need to be applying to reduce the recovery tax or delay applying (you will want to make sure you are not an auto applicant) so you will then get as increased OAS amount.
So what you want to make sure you are doing is deferring the pension so that it is increased and not applying (or auto applying) and then getting Clawed back.
𝘿𝙚𝙥𝙚𝙣𝙙𝙖𝙣𝙩𝙨 𝙣𝙤 𝙡𝙤𝙣𝙜𝙚𝙧 𝙖 𝙙𝙚𝙥𝙚𝙣𝙙𝙖𝙣𝙩:
Although you cannot choose when your dependant will no longer be a dependant, we include in our Tax Plan Timeline the year in which your children will no longer be considered a dependant.
This year you could notice 3 things happening.
One if you reside in Saskatchewan you will see your credits decrease however the second point is if kids are going to Post Secondary School you could see Credits increase.
And lastly, if you are receiving Canada Child Benefit you will see that be eliminated for that child. What we try to do is make you aware of all these changes as it will change both your tax situation and your cash flow.
𝘿𝙞𝙨𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙏𝙖𝙭 𝘾𝙧𝙚𝙙𝙞𝙩𝙨:
Is helping you apply for the Disability Tax Credit the accountant's job?
The big point here is if you don`t know to tell your accountant they will not know to suggest.
If you do not have the relationship that they are aware of your family dynamics there are going to be areas that are missed.
We ask during our planning if any children have disabilities. But let's be clear here, what is the definition of disability.
There are some situations where you would not believe your child could be approved for the disability tax credit because they are high functioning. These are credits you do not want to be missing out on.
When you sell capital assets such as a cabin or land.
These Special Circumstances come down to communication.
When you know you are planning to sell an asset making decisions about the prior tax years is just as important as future tax years.
These big changes need to be planned out.
One item is the RRSP room. It would most likely make tax sense to not use the RRSP room today knowing that you will be in a higher tax bracket next year. Delaying the use of that room if beneficial.
I could go on with Special Circumstances.
The point being here is that there are one-time special circumstances that you and your professionals need to discuss.
The difficulty here is which professional?
Having a collaborative team that all works together for you and understands all areas is key. If you are not getting the expansion to tax planning in areas such as these, you are getting tax filing not planning.