Wal, end o year is nigh (ok we still got 2 months to go)- so mebbe this might help.


Take this tax test to save money

Oct 23, 2007 04:30 AM
James Daw

Get ready class: We're having a snap test on taxes and personal finance today.

Circle T for true, or F for false beside each question, then check your answers below.

The average Canadian will get only three answers right, according to a survey done for Mackenzie Financial Corp. But taking the quiz may spark some ideas before Dec. 31.

1. You may only contribute to a registered retirement savings plan (RRSP) until the year you turn 69: T or F.

2. The annual limit for contributions to a registered education savings plan (RESP) is $4,000: T or F.

3. The year you turn 65 you might save tax by splitting half of your income from a registered retirement income fund (RRIF) with your spouse or common-law partner: T or F.

4. If you transfer a half-interest in property to an adult child, you and the joint owner must split taxes 50/50: T or F.

5. I may deduct what I pay my adult child to care for younger children at home as a child-care expense: T or F.

6. Net losses on the sale of investments may be applied to offset gains reported in any of the three preceding tax years: T or F.

7. You may claim charitable donations made before March 1, 2008 on your 2007 tax return: T or F.

8. If your redeemed or sold units of a mutual fund held outside an RRSP, you will have to include half of any realized gain on your 2007 tax return: T or F.

9. If you donate shares in BCE Inc. or other publicly traded stocks to a charity, your will pay no tax on the gain you have enjoyed since buying them: T or F.

10. You can claim a credit of up to $500 on your 2007 taxes for each child under age 16 who registered this year in a qualified physical activity: T or F.

Sandy Cardy, senior vice-president of tax and estate planning for Mackenzie says it's not surprising a survey found the average Canadian was able to answer only three of 10 questions correctly.

"Canadians are not dummies," she said. But tax rules are constantly changing, including this year. It takes time for everyone to catch up.

So, she argues, chances are high many will miss opportunities to save on taxes if they fail to seek professional advice or take action in a timely fashion.

Here are the correct answers, along with the percentage of people that Leger Marketing surveyed online between Sept. 26 and Oct. 1, 2007 who answered correctly.

1. False (20 per cent ); 2. False (17 per cent); 3. True (42 per cent); 4. False (19 per cent); 5. True (24 per cent); 6. True (40 per cent); 7. False (26 per cent); 8. True. (28 per cent); 9. True (21 per cent); 10. True (45 per cent).

Before year-end, you may wish to make a donation, sell a stock to crystallize a loss, make a large RESP contribution now that there is no annual limit apart from the new lifetime limit of $50,000, or get a receipt for a child's athletic activity.

You may wish to contribute or return money to an RRSP if you turn 70 or 71 this year.

If you turn 65, you may wish to set up an eligible income fund to split income with a spouse. Before age 65, only members of pension plans, and the spouses of deceased plan members, may elect on their tax returns to split pension income.

You should clarify in writing whether property placed in joint name with an adult child is to go to that person, or be divided with other heirs, when you die.


http://www.thestar.com/columnists/article/269338