As a result of this year's federal budget, the following is now law to help you further reduce your income taxes.

Age 71, income splitting bill passed into law

RRSP contributions

Bill C-52, from the 2007 federal budget, became law on June 22, 2007. This bill allows clients to contribute to a registered retirement savings plan (RRSP) until the end of the year in which they turn 71. Clients can reverse their registered income payment and start contributing to an RSP again. For actual terms please refer to CRA website and/or consult your tax advisor.

 

RRIF minimum payments

Clients, aged 70 or 71, holding a registered retirement income fund (RRIF) who want to defer withdrawals do not need to transfer back to an RRSP. Any RRIF annuitant turning 70 or 71 in 2007 will not have a minimum payment for this year; likewise, any RRIF annuitant turning 71 in 2008 will have no minimum payment in 2008.

 

Income splitting

Bill C-52 also includes pension income splitting rules. Those whose income qualifies for the pension income credit will be able to split up to 50% of that income with their Canadian-resident spouse. Spouses who choose to split pension income are required to file a joint election with their income tax returns for that year, acknowledging they both agree to the split.

 

Please visit the CRA website for more information.

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If you have questions or would like a price, email us, or call us today on our toll free line at 1-877-735-4487

 

Jim Kinnell, President of Kinnell Insurance and Financial Inc. and has been dedicated to providing health and living benefits offering the best combination of quality and price and 'peace of mind'. Visit http://www.Kinnellinsurance.com or contact him by email at : jim@kinnellinsurance.com

 

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