Retirement and Estate Planning

It’s Important. It’s Urgent!

We at Softron Tax service a full range of clients starting from first time taxpayer students to retired senior citizens. One thing is true for every one of our clients. They all have to retire one day and nobody is going to escape death. A lot of people fail to understand the importance and urgency of this financial issue of their life and there is a reason behind it. It is most likely not affecting your life today.

Retirement planning is about financial security of the future years and estate planning relates to wealth distribution after an individual’s death. Therefore, these financial matters are never perceived urgent but just like Rome was not built in a day, substantial retirement funds and estates are also built with years of planning and investments.

A good retirement plan includes a financial provision for all the contingencies that may occur in the retirement years like heath care costs and increased costs of living. It is of utmost importance that regular long-term investments are made into retirement funds with a concrete plan on when an individual wants to retire and what kind of lifestyle is desired in retirement.

An estate plan is of great importance as well because if the estate is not planned well ahead of time, it could push the family members of a deceased into long legal battles and the wishes of the deceased may not be fulfilled. Also poorly transferred estates can attract large amounts of tax and substantially decrease the actual benefit for the beneficiaries. A well written Will can save an individual and his family, thousands of tax dollars and time.

Softron Tax has taken the initiative and launched a Trust and Estate Planning Course – a first of its kind in the industry. It covers all the essentials of retirement planning, estate planning and taxation of trusts. A candidate who successfully completes the course can confidently create Wills, Power of Attorneys and file T3 returns. It is a great course for every Canadian resident as the course material will make you think about your future goals and set you on the path of retirement and estate planning. The details of the course can be viewed at

As I said that Retirement and Estate Planning is both urgent and important. So plan ahead and do it right!!

And the Winner Is…………..

The Election Campaign is in its last lap and all the major parties have tried hard in the past few months to convince the Canadian voters that they are the best bet for the future. Taxes are always a hot topic during the elections and all the parties are planning different tax cuts/increases if they are chosen to power.

We are soon going to have a winner but in today’s blog, we discuss different tax related topics for this election and ensure that our readers are the biggest winners when they make their choice.

Donate Tax-Wise: A lot of people are making political donations during the election season. Although we have a federal election underway at this time but it is important for you to know that political donations made to Federal political parties are tax deductible only to the extent of federal tax payable with a maximum tax credit of $650. It is a non-refundable tax credit. However any donations made to provincial political parties in Ontario generate a refundable tax credit. The maximum tax credit for provincial donation is $1330 which is more than double the federal limit. This means the taxpayers are better off making a donation to the provincially registered political party rather than the federal one. So for example, if you support the Liberal Party of Canada, you are better off making a donation to Ontario’s liberal party.

The Promises: All the political parties have come up with their action plan regarding taxes if voted to power. The present Conservative Government introduced Income Splitting and Enhanced UCCB last year. They promise to keep the taxes and benefits same for the individuals while reducing the small business tax rate from 11 percent to 9 percent by 2019. They are also promising an EI premium cut in 2017 which will marginally increase the size of your paychecks.

The Liberal party is promising an increase in tax for people who make more than $ 200,000 annually and they are proposing a 1.5% tax cut for taxpayers who have their income between $44K and $90K with the extra tax revenue they will generate. They are also proposing a smaller EI premium cut as compared to Conservatives in 2017 while extending the EI benefits. The biggest promise of the liberal party is to repackage the UCCB and Canada Chile Care Tax Benefit in a way that it will put more money in the pockets of middle class while lowering the benefits for people with family incomes of more than 200K

The NDP is promising a tax rate cut for small businesses from 11 to 9 percent in 2017 and increased corporate taxes. Both NDP and liberals plan on cancelling the income splitting and the increases TFSA Limit.

Canada is witnessing a very tight race in this year’s election with all three parties coming out as strong contenders to win his election. Overall all the parties are gunning for the middle class vote and this can be seen in their tax promises where they promise that taxes would go down for the middle class and increase for the rich.

However, the bottom line is that Death and Taxes are here to stay and while we will have a winner soon for these elections, Softron wishes that you, the Canadian tax payer turn out to be the biggest winner of all. So go out and vote to strengthen the democratic process and let’s make the taxpayers of this country a big winner !

Ontario Budget 2015: Promises, Few good steps and a Mountain of Debt

The Ontario 2015 budget was presented last week and while a few new projects were announced, the highlight of the budget remained the high deficit which currently sits at $8.5 billion. While the projections have been made for a balanced budget by 2018, the government plans to achieve most of it through spending cuts. However the budget proposes increase in spending in some key areas like infrastructure and public transit.

Following are the key points of the 2015 provincial budget:

  • OSAP Reforms for Students: The students will not have to deduct the value of their car or the part time work income when they apply for the Student loan. Also the maximum OSAP cap will be indexed to inflation for the future. The government will also be allowing to apply for OSAP grants and loan separately. This means that students can apply for grants while still having a choice of not taking on the debt for their education
  • Winning with winter tires: The government will make it mandatory for the insurance companies to give a discount to the drivers that use winter tires. Also the insurance companies will not be allowed to increase the premium for minor accidents that do not cause any serious injury
  • In the works….: The new projects that were announced in the budget include building of 8 new schools (six elementary and 2 secondary) and a new mega court for the GTA merging the provincial court houses which will consolidate operations for Ontario court of Justice and Superior court of justice The government will also be spending $11.9 billion on infrastructure development which is part of the $130 billion spending plan over 10 years.
  • The Promises: A few measures were announced in the budget where the details were limited. The Ontario Pension Plan will be established in January 2017 but the details on how it will work are yet to be announced. Similarly a plan to build a high speed train between Toronto and Windsor was announced with no time line or commitment.
  • Caring for the Sharing economy: The government renewed its commitment to support and help business like UBER which promote the sharing economy by helping them comply with the regulations
  • Power to the Nurses: A major step was announced where the nurse practitioners would be able to refer patients to the specialists. This is great news for Northern Ontario and some rural areas where primary care is provided by nurse practitioners as opposed to general physicians.

The government will also continue with the wage freeze in the public sector. However it remains to be seen that how the government will achieve the $4 billion deficit reduction projected for this fiscal year. A $2.8 billion “other programs cut” has been announced with no details and some revenue will be generated by selling off assets.