2007
Budget Review
As you
know, Finance Minister Jim Flaherty delivered his second
federal budget on Monday in Ottawa.
This
budget has many items that could affect your financial plan
and present additional savings and investment opportunities.
In case you haven't had a chance to review the media coverage,
I thought you would appreciate a quick overview of the federal
budget.
New
Child Tax Credit: A new $2,000 child tax credit
will provide up to $310 of tax relief per child under 18.
Spousal
and Other Amounts: The government increases the
spousal and dependent amounts to match the basic personal
amount for families with only one breadwinner. This will
provide up to $209 of tax relief for a supporting spouse
or single taxpayer that is supporting a child or relative.
Registered
Education Savings Plan (RESP): The lifetime RESP
contribution grows to $50,000 from $42,000 and the government
will increase the amount of annual contributions eligible
for the 20% Canada Education Savings Grant to $2,500 from
$2,000. They also plan to eliminate $4,000 annual limit
on contributions and extend RESP eligibility requirements
to more part-time studies.
Registered
Disability Savings Plan (RDSP): The RDSP, expected
to debut in 2008, will help secure the financial futures
of children who have severe disabilities. Parents or guardians
of such children can contribute to an RDSP and receive matching
contributions from a Canada Disability Savings Grant of
100%, 200% or 300%, depending on family income. The RDSP
is based on the existing RESP model.
Age
Limit for Maturing Retirement Plans: Seniors will
now have until age 71 instead of age 69 to convert their
Registered Retirement Savings Plans and Registered Pension
Plans.
Lifetime
Capital Gains Exemption: Effective immediately,
the government will increase the lifetime capital gains
exemption for small businesses, farmers and fishers to $750,000
from $500,000.
0%
Capital Gains on Donations: Those who wish to donate
publicly traded securities to a private foundation will
no longer have to pay capital gains tax.
I hope
you find these highlights useful. If you'd like to discuss
these and other federal budget initiatives and how they
affect your financial plan, please don't hesitate to contact
me.
For
those of you who are doing your taxes using tax preparation
software, Manulife Financial's website which provides a
25% discount on QuickTax.
As well I have attached a Tax
Checklist to assist you in preparing your tax returns.
If
you have any questions or concerns, please do not hesitate
contact our office.
