Latest news with #JasonHeath
Vancouver Sun
10-06-2025
- Business
- Vancouver Sun
CRA delayed in updating TFSA contribution room. Better to wait, advisors say
Unless you are willing to calculate your Tax-Free Savings Account contribution room, you'll have to wait for the Canada Revenue Agency to get caught up. Individual contribution room is usually easily available by signing into your CRA account. Alternatively, you could usually call the Tax Information Phone Service. However, that hasn't been so since mid-April . Up-to-date numbers indicating taxpayers' TFSA contribution room haven't been made available. Unlike RRSP contribution room, 'TFSA room is not shown on your notice of assessment,' says Jason Heath, managing director of Objective Financial Planners in Toronto. 'Even when you try to view your TFSA details like the contribution history, it too is unavailable.' Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. Instead, a warning has been posted on the CRA site, says Robert Kepes, a tax lawyer with Toronto firm Morris Kepes Winter LLP. The warning states : 'TFSA information, including contribution room, is updated once your financial institution's annual TFSA return is processed. We are experiencing delays in processing these returns as a result of a new data validation process. TFSA information is temporarily unavailable in your CRA account to prevent errors.' Instead, the CRA is urging taxpayers to calculate it themselves using the following: Form RC343, Worksheet – TFSA contribution room . And there is an added reminder to keep records of your TFSA transactions 'to make sure that your contributions do not go over your TFSA contribution room,' which is what taxpayers are concerned about in the first place. As to when this will be resolved, 'the CRA has yet to provide a timeline for resolution,' says Heath. You could try to determine your TFSA room by looking at all your past contributions and withdrawals since 2009 when TFSA accounts were introduced, he suggests. If you were 18 or older in 2009 and have always lived in Canada, your cumulative TFSA room would be $102,000. But there's a big caveat. 'The problem is a mistake could lead to a TFSA overcontribution, and financial institution records may not go back 16 years.' And a overcontribution is no small matter. 'The risk of making an overcontribution is significant. There is a penalty of 1 per cent per month for any overcontribution to a TFSA. And if a contributor messes up and forgets, it may be years from now (before the) CRA notices. Years of penalties and interest can add up fast, and CRA does not always show leniency with inadvertent errors.' So, it may be better to be safe than sorry. 'As such, TFSA holders may want to wait if they are uncertain about their TFSA room until CRA's records are updated,' Heath suggests. Meanwhile, the CRA says it's aware of this concern. In an email to National Post, Sylvie Branch with CRA media relations writes that the agency recognizes the importance of its online services for taxpayers and 'strives to minimize service outages.' TFSA contribution room is generally updated on Jan. 1 of each year to reflect the new annual TFSA limit, says Branch. Adjustments to the contribution room are made when a taxpayer's financial institution's TFSA annual information return has been processed by the CRA. However, this year's delay, says Branch, stems from the agency striving to improve data accuracy. Echoing the warning on the CRA site, she writes of the agency introducing a new data validation process in January 2025. The institutions filing the information 'had to get accustomed to the new system, adapt to new processes, and … contend with stricter validation of the data they submit to the CRA.' 'As a result, there have been significant delays in processing TFSA annual information returns this year. Resolving our system issues, is our priority, so that we can update TFSA information in My Account as soon as possible.' Unfortunately, she adds, the CRA does 'not have an expected date for the resumption of service. We regret the inconvenience and thank taxpayers for their patience.' Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
Edmonton Journal
10-06-2025
- Business
- Edmonton Journal
CRA delayed in updating TFSA contribution room. Better to wait, advisors say
Article content Unless you are willing to calculate your Tax-Free Savings Account contribution room, you'll have to wait for the Canada Revenue Agency to get caught up. Individual contribution room is usually easily available by signing into your CRA account. Alternatively, you could usually call the Tax Information Phone Service. However, that hasn't been so since mid-April. Up-to-date numbers indicating taxpayers' TFSA contribution room haven't been made available. Article content Unlike RRSP contribution room, 'TFSA room is not shown on your notice of assessment,' says Jason Heath, managing director of Objective Financial Planners in Toronto. 'Even when you try to view your TFSA details like the contribution history, it too is unavailable.' Instead, a warning has been posted on the CRA site, says Robert Kepes, a tax lawyer with Toronto firm Morris Kepes Winter LLP. The warning states: 'TFSA information, including contribution room, is updated once your financial institution's annual TFSA return is processed. We are experiencing delays in processing these returns as a result of a new data validation process. TFSA information is temporarily unavailable in your CRA account to prevent errors.' Instead, the CRA is urging taxpayers to calculate it themselves using the following: Form RC343, Worksheet – TFSA contribution room. Article content And there is an added reminder to keep records of your TFSA transactions 'to make sure that your contributions do not go over your TFSA contribution room,' which is what taxpayers are concerned about in the first place. As to when this will be resolved, 'the CRA has yet to provide a timeline for resolution,' says Heath. You could try to determine your TFSA room by looking at all your past contributions and withdrawals since 2009 when TFSA accounts were introduced, he suggests. If you were 18 or older in 2009 and have always lived in Canada, your cumulative TFSA room would be $102,000. But there's a big caveat. 'The problem is a mistake could lead to a TFSA overcontribution, and financial institution records may not go back 16 years.' And a overcontribution is no small matter. 'The risk of making an overcontribution is significant. There is a penalty of 1 per cent per month for any overcontribution to a TFSA. And if a contributor messes up and forgets, it may be years from now (before the) CRA notices. Years of penalties and interest can add up fast, and CRA does not always show leniency with inadvertent errors.' Article content So, it may be better to be safe than sorry. 'As such, TFSA holders may want to wait if they are uncertain about their TFSA room until CRA's records are updated,' Heath suggests. Meanwhile, the CRA says it's aware of this concern. In an email to National Post, Sylvie Branch with CRA media relations writes that the agency recognizes the importance of its online services for taxpayers and 'strives to minimize service outages.' TFSA contribution room is generally updated on Jan. 1 of each year to reflect the new annual TFSA limit, says Branch. Adjustments to the contribution room are made when a taxpayer's financial institution's TFSA annual information return has been processed by the CRA. However, this year's delay, says Branch, stems from the agency striving to improve data accuracy. Echoing the warning on the CRA site, she writes of the agency introducing a new data validation process in January 2025. The institutions filing the information 'had to get accustomed to the new system, adapt to new processes, and … contend with stricter validation of the data they submit to the CRA.' 'As a result, there have been significant delays in processing TFSA annual information returns this year. Resolving our system issues, is our priority, so that we can update TFSA information in My Account as soon as possible.' Unfortunately, she adds, the CRA does 'not have an expected date for the resumption of service. We regret the inconvenience and thank taxpayers for their patience.' Latest National Stories
National Post
10-06-2025
- Business
- National Post
CRA delayed in updating TFSA contribution room. Better to wait, advisors say
Unless you are willing to calculate your Tax-Free Savings Account contribution room, you'll have to wait for the Canada Revenue Agency to get caught up. Article content Individual contribution room is usually easily available by signing into your CRA account. Alternatively, you could usually call the Tax Information Phone Service. Article content Article content However, that hasn't been so since mid-April. Up-to-date numbers indicating taxpayers' TFSA contribution room haven't been made available. Article content Unlike RRSP contribution room, 'TFSA room is not shown on your notice of assessment,' says Jason Heath, managing director of Objective Financial Planners in Toronto. 'Even when you try to view your TFSA details like the contribution history, it too is unavailable.' Article content Article content Instead, a warning has been posted on the CRA site, says Robert Kepes, a tax lawyer with Toronto firm Morris Kepes Winter LLP. Article content The warning states: 'TFSA information, including contribution room, is updated once your financial institution's annual TFSA return is processed. We are experiencing delays in processing these returns as a result of a new data validation process. TFSA information is temporarily unavailable in your CRA account to prevent errors.' Article content Instead, the CRA is urging taxpayers to calculate it themselves using the following: Form RC343, Worksheet – TFSA contribution room. Article content And there is an added reminder to keep records of your TFSA transactions 'to make sure that your contributions do not go over your TFSA contribution room,' which is what taxpayers are concerned about in the first place. Article content Article content As to when this will be resolved, 'the CRA has yet to provide a timeline for resolution,' says Heath. Article content You could try to determine your TFSA room by looking at all your past contributions and withdrawals since 2009 when TFSA accounts were introduced, he suggests. If you were 18 or older in 2009 and have always lived in Canada, your cumulative TFSA room would be $102,000. Article content But there's a big caveat. Article content 'The problem is a mistake could lead to a TFSA overcontribution, and financial institution records may not go back 16 years.' Article content And a overcontribution is no small matter. Article content 'The risk of making an overcontribution is significant. There is a penalty of 1 per cent per month for any overcontribution to a TFSA. And if a contributor messes up and forgets, it may be years from now (before the) CRA notices. Years of penalties and interest can add up fast, and CRA does not always show leniency with inadvertent errors.'
Globe and Mail
02-06-2025
- Business
- Globe and Mail
With a new GST rebate coming, here's a refresher on other tax breaks for first-time homebuyers
The federal government is moving ahead with a new GST rebate for first-time homebuyers, which may complement existing programs aimed at making housing more affordable. Advisors who help clients, or their clients' children, navigate the purchase of a first home can broaden and deepen their relationship with both the client and family. 'It ends up putting you in situations in which you're having more holistic conversations with a client,' says Jason Heath, a managing partner at Objective Financial Partners Inc. in Markham, Ont. While some tax programs for first-time homebuyers are well known, others are sometimes overlooked and missed, Mr. Heath says. In general, to qualify for these federal tax programs, a first-time homebuyer is someone who has not lived in a home that they or their spouse or common-law partner owns either in the current year or any of the previous four years. Here are the key programs and credits that already exist, in addition to the proposed new first-time homebuyers' GST cut. The FHSA, introduced in 2023, allows a first-time homebuyer to save up to a lifetime limit of $40,000 toward a home purchase. Annual contributions of $8,000 (plus up to a maximum of $8,000 of carry-forward contribution room) to the FHSA are tax-deductible, while withdrawals from the account to purchase a qualifying home, including any growth, are tax-free. Ideally, a first-time homebuyer would open and begin contributing to an FHSA at least a few years before buying a home, Mr. Heath says, because FHSA contribution room begins to accumulate only after someone opens an account. However, a first-time homebuyer can still open an FHSA in the year they buy a home and contribute $8,000 before making a withdrawal. That's because there's no minimum number of days that contributions must be held in an FHSA before being used to make a qualifying withdrawal. What is a qualifying withdrawal? An FHSA withdrawal counts as a qualifying withdrawal if the account holder has a written agreement to buy or build a home by Oct. 1 of the following year, or has bought a home within 30 days before making the withdrawal. Also, the FHSA holder must not have lived in a home they owned in the year of withdrawal or any of the previous four years. Whether the FHSA holder lives in a home their spouse or partner owns isn't a determining factor when making a qualifying withdrawal. The HBP allows a first-time homebuyer to borrow from their RRSP to buy a home without being taxed on the amount. Last year, the federal government increased the amount that can be borrowed to $60,000 from $35,000. 'The old limits didn't allow you to access very much RRSP money,' Mr. Heath says, so the increased amount might allow for a bigger down payment. The borrowed amount generally must be paid back in instalments over 15 years. If the annual minimum repayment isn't made, that amount becomes taxable. Under a temporary change made last year, for withdrawals between Jan. 1, 2022 and Dec. 31, 2025, instalment payments don't have to begin until five years following the year of withdrawal, up from two years under the regular HBP rules. Unlike the FHSA, contributions to an RRSP must remain in the plan for at least 90 days before they can be withdrawn for purposes of the HBP. The Income Tax Act allows first-time home buyers to access both the FHSA and the HBP to purchase the same home. And spouses and partners can each use their own FHSAs and access the HBP to buy the same house. The HBA allows a first-time homebuyer to claim a non-refundable tax credit of $1,500 (which is calculated as 15 per cent of the $10,000 HBA). While the HBA is meant to help first-time homebuyers offset costs associated with buying a new home, those claiming the amount don't have to track expenses. If both spouses qualify as first-time homebuyers, the amount can be split between spouses but the total credit remains $1,500. (The Liberals have proposed a cut to the lowest income tax bracket from 15 per cent to 14 per cent, effective July 1, which would affect the value of the credit.) Mr. Heath says eligible homebuyers sometimes miss claiming the HBA if their tax software doesn't prompt them or if they don't inform their tax preparer that they've bought their first home. The credit is claimed in the year the home is acquired. Provinces and cities may offer their own tax breaks or credits for first-time homebuyers. For example, Ontario provides first-time homebuyers with a land transfer tax rebate, as does the city of Toronto.
Globe and Mail
21-05-2025
- Business
- Globe and Mail
Stress-test your retirement: Four smart moves to make now
Retirement is supposed to be the reward for a lifetime of work. For many Canadians, it has become another risk to manage. Tariff wars, financial uncertainty and recession worries have roiled markets and investment portfolios. That has put a damper on retirement plans for some. Others in the workforce in their 50s or 60s are eyeing the economic impacts on their sector, and on potential job losses that might force an earlier than expected retirement. Even if your retirement plan hasn't felt the pressure yet, it's time to stress test it. Here are four steps to take. Start with the foundation: budgeting 101, says Doug Nelson, a certified financial planner based in Winnipeg. That includes your living needs (food, shelter, transportation) plus your lifestyle wants (traveling the world, honing your pickleball game). It's a basic step, but one that many people ignore. A recent national study found that 70 per cent of Canadians surveyed do not use budgeting tools to help them track and manage their finances. The results of such an exercise may be an eye opener, but 'when you know your expenses, you can adapt to your changing circumstances,' Nelson says. Taking stock of spending today can help you get to a better place no matter when retirement actually arrives. 'It's the sort of thing I often highlight for senior executives in their 50s,' says Jason Heath, a fee-only certified financial planner based in Toronto. He says losing a high-salary gig is a common fear among this demographic. If they do, they're unlikely to be able to ever replace that level of income. 'But if you ramp up your savings and decrease your spending now, and you get used to it, that makes it much easier to maintain in retirement,' Heath says. Part of grasping retirement readiness is crunching all of the current and future numbers: your investment portfolio, Canada Pension Plan (CPP), Old Age Security, workplace plans and any other income-generating assets. This is the time to take a deep dive on your portfolio and its construction. 'Your investment risk tolerance may have changed if you're shifting from accumulation to decumulation,' says Ian Wood, a certified financial planner in Winnipeg. Some people may feel they need to draw on investments earlier than anticipated, before becoming eligible for government pensions. That's why it's vital to look at the big picture for income. For instance, 'Those eligible for workplace pensions may be able to keep their portfolio intact for longer-term needs,' says Mr. Heath. Failing that, you might consider temporary alternative sources of income. With recent equity market declines, this may not be the ideal time to rebalance and to sell stocks to raise cash. Among those alternative income sources is a line of credit (LOC). If you don't have one yet, consider applying now. 'In the event of a job loss, where you decide you need access to a line of credit but don't have one, the bank isn't going to give it to you because you have no income,' says Mr. Heath. An LOC can be handy in other instances of a sudden transition from work to retirement, he explains. For example, a large severance might rocket you into the highest tax bracket of your life. That has an impact on any withdrawals from registered accounts. In this case, an LOC could provide additional tax-free cash. Then, the following tax year, you can withdraw from your RRSP to repay the LOC, incurring less tax, Mr. Heath explains. Big drawdowns from a portfolio early in retirement can have an outsized impact on your long-term retirement picture, Mr. Nelson says. You aren't withdrawing just that money, but its future value. Consider a scenario where you're withdrawing an additional $30,000 from your RRSP. If that money was to earn 7 per cent in the RRSP, in 20 years it would have turned into more like $120,000. Insights like these that might lead to different decisions, such as drawing on a workplace plan or CPP earlier to preserve invested capital for the long-term. Some retirees might decide to find part-time, reduce spending, withdraw less from retirement savings, or do a combination of all three. 'There's no one right or wrong answer,' Mr. Wood says. 'Sometimes, the process includes facing the difficult reality that not all goals are financially attainable.' Plans aren't static. Running the numbers with a financial planner and testing various scenarios can inform decisions – especially if retirement arrives earlier or later than expected. The outcomes can make for tough conversations. Still, 'It's far better to have them while you still have choices, not when those choices have been taken away,' says Mr. Wood.
