ts Business TheReview Wednesday, December 9, 1992 — C13

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Keeping up with the latest tax rules

Keeping up with tax rule
changes is an unending task. Yet
you must stay current to make sure
(1) you don’t miss any credits or
deductions and (2) you report the
correct income and pay taxes on
time to avoid unexpected penalties
and interest charges.

Price Waterhouse, chartered
accountants, has just published a
108-page large format book, Per-
sonal Tax Strategy, 1992-93. The
guide, available free to the firm’s
clients and contacts, focuses on
employees, owner-managers,
investors, retired people, separ-
ated/divorced people, taxpayers
with U.S. connections, and calcu-
lating your taxes and filing your
Tetum. _

Tt also includes a helpful sum-
mary of tax changes (some still in
the proposal stage following the
last federal budget) and their
implications. I’ve expanded on
some of the points and added
others.

— Until March 1, 1993, you
may take up to $20,000 out of your
RRSP free of tax to build or buy a
principal residence. (As men-
tioned in an earlier column, this
gil restrict your ability to make a
ductible RRSP contribution for
mie 1992 tax year.) You must repay

‘If you do gefa
refund, Revenue
Canada will pay
interest only after

June 14, instead of
after April 30 as in
the pas?’

the money over 15 years; any
missed payments will be added to
your income and taxed.

— The registered pension plan,
registered retirement savings plan
and deferred profit sharing plan
contribution limits for 1993 will
be the same as for 1992. To make
the maximum $12,500 RRSP con-
tributions for 1992 and 1993, you
will need earned income of
$69,444 in 1991 and 1992, respec-
tively, :

— If you receive CPP disability
income, this now qualifies as
eamed income on which to base
an RRSP contribution, effective
with CPP disability income
received in 1991.

— A registered retirement
income fund may be used to

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provide payments for you or your
spouse until death; under the old
tules, age 90 was the limit. Con-
verting an RRSP to an RRIF
before Dec. 31, 1992, will allow
smaller minimum withdrawals
until age 78 — but taking money
sooner than required might
increase your total income tax bill
over the life of the RRIE

(Note that Revenue Canada has
just published its 68-page, 1992
Pension and RRSP Tax Guide,
which also deals with RRIFs. You
can get a free copy by contracting
your local tax office.)

— If you have defaulted on
student loans or haven’t repaid
unemployment insurance benefits
as required, Revenue Canada will
deduct these amounts from any
Tefund you might otherwise be
expecting.

— lf you do get a refund,
Revenue Canada will pay. interest
only after June 14, instead of after
April 30 as in the past. If you file
your tax return after June 14, then
interest will be paid only from that

— Common-law spouses will
be treated as married spouses for
tax purposes starting in 1993. That
means, for example, you may make
spousal RRSP contributions and
claim the marital tax credit, but it
also means investment income and
capital gains might be attributed
back if one spouse lends or gives
money to the other.

— The Child Tax Benefit system
will replace family allowance pay-
ments and the various child tax

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credits starting in January. The
monthly benefit will depend on
family income and the number of
children. Investing this benefit in
the name of the child (or in your
name in trust for the child) means
the child (instead of you) can
declare the investment income and
so will pay little or no tax — the
same approach that worked for
family allowance cheques.

— You may no longer use the
$100,000 capital gains exemption
to escape tax on gains you make
on investment real estate Gnclud-
ing recreational property) bought
after February, 1992. You may still
use at least some of the capital
gains exemption for property you
bought before last March.

— Ottawa is increasing for the
1992 tax year both the education
credit and the maximum education
and tuition fee credits that may be
transferred to a student’s support-
ing individual. The federal credit
for the education amount rises to
$13.60 a month (for a total tax
credit of about $21 a month by the
time you add the provincial cre-
dit). The maximum transferable
federal credit rises to $680, or a
total of about $1,071 after
accounting for surtaxes and the
provincial credit.

— Revenue Canada will tell you
what quarterly installments you
need to make. As long as you use
this system and pay on time, you
will never have to pay interest or
penalties even if these payments
fall short of the tax you owe for the
year. However, you may still calcu-
late the installment payments
yourself if that is to your advan-
tage.

Mike Grenby is a Vancouver-
based columnist and independent
financial adviser who works with
individuals; he will answer your
questions as space allows — write
to him clo The Review, 9726-First
St, Sidney, B.C., VSL 3C7.

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DISTICT OF

NORTH SAANICH
Invitation To Tender
Public Works Building

Sealed tenders marked “Public Works Building” will
be received up to 11:00 A.M. Wednesday, Dec.
16th, 1992 by the Municipal Engineer, North
Saanich Municipal Hall, 1620 Mills Rd., North
Saanich, B.C. for the following:

1650 sq.ft. (approx.) Frame Construction
Public Works Building Adjacent to
the Municipal Hall at 1620 Mills Rd.

Tenders must be accompanied by a bid bond or
certified cheque in the amount of 10% of the tender
sum.

The lowest or any tender may not necessarily
be accepted.

Tender documents may be obtained from the office
of Peninsula Design, suite B, 2412 Beacon Ave.,
Sidney, B.C. Commencing 11:00 A.M., Monday
Dec. 7th, 1992 upon payment of $25.

Enquires should be directed to Norm Friesen,
Peninsula Design at suite B, 2412 Beacon Ave.,
Sidney. Telephone (604) 656-1708.

T.J. Parry, REng., Municipal Engineer
District of North Saanich
1620 Mills Road, North Saanich, B.C.

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