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Frank Mueller

Weekly Update – April 8, 2016

TSX REBOUNDS FRIDAY ON STRONG JOBS NUMBERS, OIL SURGE

The S&P/TSX Composite closed the week at 13,396.73, down 0.3% for the week. At a 2.9% gain year-to-date, Toronto’s main index continues to trail only New Zealand’s index – the world’s best 2016 performer.

While down much of the week, a Friday surge, spurred by encouraging jobs numbers and a 6.6% jump in oil, helped the TSX to cut its losses for the week.

Strong Canadian jobs numbers for March posted a stronger-than-expected increase. A potential knock-on effect of this news could be felt on April 13th, if the Bank of Canada decides not to cut rates again. Before the jobs numbers were released, there was speculation of a rate cut happening again with hopes of further economy stimulation.

Oil enjoyed a healthy jump to finish the week, as data from the Energy Information Administration showed a decreasing U.S. production for the 10th time in 11 weeks, as well as decreased crude stockpiles. West Texas Intermediate May futures closed at $39.72USD per barrel, almost a 50% increase from the February lows, while Brent June futures closed at $41.92USD per barrel. A meeting of oil-producing countries, scheduled for April 17th in Doha, is highly anticipated, as an agreement to freeze output would buoy oil’s price further. John Kilduff, partner at New York energy-focused Hedge Fund Again Capital LLC, stated “We’re still hemmed in a range below $40. Breaking through would be very bullish for the market”.

However, many analysts aren’t believers in an extended oil rally, citing Iran’s goal of winning market share, as well as the world total supply surplus as the main reasons not to believe the hype. Without Iran being on board with a supply cut, other producers cutting supply would only lead to a loss in market share to Iran.

 

Blog Posts

To Buy Or Not To Buy, That Is The Question

How To Take The Bite Out At Tax Time

We Are Not Burger King, And That’s A Good Thing

 

SOURCES: Globe Investor

Odette Morin

We are not Burger King, and that’s a good thing!

Burger kin

Do you remember the Burger King ads that ran years ago? They always ended with “Have it your way”. It was a positive message that conveyed the importance of client satisfaction.

Fast-forward to today and the You First tax checklists (I bet you didn’t see that coming!). Despite all appearances, asking you to complete these lists our way also represents a desire to satisfy our clients.

After all, the less time we spend asking questions and trying to organize your information, the less it will cost you, and the more likely you’ll benefit from our below market tax preparation rates.

In addition, those clients who complete the checklists as required benefit from a 20% discount on their total. Those who don’t will have to pay full price.

So, while Burger King might hold the lettuce, we’re holding onto our outstanding value.

When you complete the checklists as instructed, we’re able to enter the data into our tax software and in the order which the system requires. It’s efficient and cost-effective.

However, even the slightest discrepancy can result in extra time for us.

We’ve had clients deliver organized, colour-coded and exceptionally detailed information. Yet, because it differed from our software’s system, the time we invested increased, as did our cost.

The fact is, we want to spend all of our time saving you money and making you money. Nevertheless, if you want us to spend time on you unnecessarily, then have it your way (but it will cost you!)

You can find all of our checklists here.

 

Thank you for preparing our Tax checklists

 

Odette Morin

How to take the bite out at tax time

Amy Lou

Most of you know our little pet, Amy Lou. She weighs 7 pounds and stands no more than a foot tall. Yet, despite her stature, she guards our workplace fiercely.

After all, there’s just no office more important.

I realized as she was barking at someone today that we’re similar – and no, not because of her bark! You see, we both protect what matters to us. In my case, it’s my clients. And, while I don’t bark, I do ask a lot of questions particularly at tax time.

The reason for this is two-fold. For one, I want to maximize all the opportunities and deductions available to you. I also want to insulate you from preventable predicaments with the Canadian Revenue Agency.

That’s where my protective nature comes in, as does that of our entire team.

By asking a lot of questions and requesting documentation to justify the figures presented, we can ensure that you’re very well armed for a CRA review or assessment – which have become more frequent.

It used to be that people would file their returns, documents intact, via regular mail. However, all that’s changed. Nowadays, returns tend to be filed electronically and don’t include documentation. As such, random checks have become more commonplace.

By the way, should you be picked, don’t panic. It’s not an audit. In addition, by managing your returns as thoroughly as we do, we’re in a good position to help you present what the CRA requires in due time and in the best way.

If you’ve been thinking, “that Odette is like a dog with a bone!” now you know why. So please be sure to complete our helpful tax return checklists and have all your documents organized.

Get our tax checklist here

 

Frank Mueller

Weekly Update – April 1, 2016

TSX FINISHES MARCH UP 4.9% DESPITE LOSSES TO END THE WEEK

The S&P/TSX Composite closed the week at 13,440.44, and as March came to a close, the TSX enjoyed its strongest monthly advance since October of 2011 by posting a 4.9% gain. At a 2.7% gain year-to-date, Toronto’s main index remains behind only New Zealand’s index as the world’s best 2016 performer.

The Thursday and Friday TSX losses were led, as usual, by drops in crude oil and resources such as gold.

Oil fell below $37USD per barrel, wiping out much of it’s gains year-to-date. Comments by Saudi Arabia’s deputy crown prince, Mohammed bin Salman, were a major reason for the drop, as he stated Saudi Arabia won’t freeze output unless other major oil producers do so. Meanwhile, world-wide oil production continues at between 1-2 million barrels per day of surplus. As weather warms with the change to Spring, demand could wane. Add all these factors together, and further drops in oil’s valuation is a very real possibility.

Strong US jobs numbers for March – our southerly neighbour added 215,000 jobs – paced expectations by about 10,000, improving the overall outlook about the US economy. Adding to the positive US news was speculation about a sooner-than-expected rate hike by the Federal Reserve.

Naturally, US jobs and Fed rate hike news weighed on gold, and the metal was down by 1% before settling at $1,223.50USD at market close. For the first quarter of 2016, gold has surged to a 16% increase in price. This represents the strongest quarterly rise in decades.

TAX TIME HAS COME AGAIN

Usually, the deadline for individuals not self-employed is April 30th. However, in years – such as 2016 – where April 30th falls on a weekend or holiday, the CRA considers your return to be filed on time if they receive the return/payment on the next business day. The 2016 exception date is Monday, May 2nd.

Self-employed persons must still pay any balances outstanding on/before May 2nd, but they can file their return on or before June 15th.

If you are the executor of the estate for a deceased person who died in 2015, you might have to file a 2015 tax return for that person.

Some helpful links:

T4011 Preparing Returns for Deceased Persons 2015

What To Do Following A Death

When Do You Have To Pay Your 2016 Instalments?

 

Sources: Globe Advisor, Canada Revenue Agency Website

 

Odette Morin

2016 Federal Budget Highlights

Federal Budget Highlights

The Trudeau Liberal federal government tabled its first budget. Here are the highlights of the so called middle-class focused budget:

  • Canada Child Benefit: New monthly tax-free payments starts July 1 to replace UCCB and other tax measures.  The new benefit will pay up to $6,400 a year per child under 6, and $5,400 those aged 6 to 18. But this amount begins to claw back for households with an income over $30,000 and is eliminated entirely for incomes over $190,000.  You can use this calculator to see how it will affect your child benefit.  http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html
  • Elimination of tax credits –tax splitting for couples with children, as well as children’s fitness and arts credits are being phased out by 2017.
  • Seniors: Guaranteed Income Supplement increased by up to $947 annually.
  • OAS: the benefit eligibility has been restored to age 65 from age 67.
  • Student grants: Increased 50%, to $3,000 for low-income and $1,200 for middle-income students.
  • Teachers get a $150 credit for teaching materials.
  • EI: Changes make it easier to qualify for benefits, and extends benefits for workers in 12 hard-hit regions. Plus: a bigger-than-expected cut in EI premiums next January.
  • Infrastructure: $120 billion over 10 years, focusing first on public transit, water, waste management and housing infrastructure.
  • Indigenous Peoples: $8.4 billion over five years, with $2.6 of that to improve primary and secondary education on reserves. Other funding for drinking water and housing, as well as family and child services.
  • Arts: $1.9 billion over five years for arts and culture organizations, including the Canada Council, Telefilm Canada and the National Arts Centre. $675 million to “modernize and revitalize CBC/Radio-Canada in the digital era.”
  • Veterans: Reopens nine service offices, increases amounts payable to injured veterans and indexes some benefits to inflation.

How much will it cost?

  • Deficit: $29.4 billion this year, $29 billion the next before falling – but no surplus forecast before the next election.
  • Debt: Expected to grow by $113 billion by 2020-21, but debt-to-GDP ratio to stay mostly flat at around 32 per cent.
  • Growth: Deficit based on 0.4% annual growth – much lower than economists predict.

Where does the money go?

  • $11.9 billion over five years to modernize and upgrade infrastructure systems, including transit and water
  • $23 billion in 2016-17 to administer the new Canada Child Benefit
  • $8.4 billion over 5 years for Canada’s indigenous people and their communities
  • $40 million over two years for the inquiry into missing and murdered indigenous women
  • $2 billion over three years for a new post-secondary strategic investment fund

What is not in the budget?

  • No changes to the capital gains rates
  • No changes to corporate tax rates

Source: CBC, CTV, BNN, Yahoo finance.

2016-budget

Odette Morin

Possible changes to the Capital Gains tax rate, should you trigger gains before Tuesday?

tax increase

 

There is talk that Tuesday’s 2016 Federal Budget will announce changes to the capital gains tax rate. Currently, only 50% of capital gains are taxable. The new government is facing a larger deficit than anticipated and may be on the look out to get more tax revenues. Some speculate that the capital gains rate may be increased to 66.67% or even 75% like it used to be. Should you take action now and trigger your gains to take advantage of the lower taxable gains?

We do not recommend taking action based on speculation. These are just rumours and triggering a taxable gain today may not be necessary. In any event, deferring a gain is most often better even if it means a bigger taxable gain in several years from now. Here is some information about other potential tax changes that may affect you.

Stay tuned, we will have a summary of all actual changes on Tuesday!

Read the article here