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The Canadian Champion, Friday, February 2, 2007 - B W YOUR FINAN UAL FUu Make your RRSP contribution count (NO) -Every January, tax analyst Luciano DeGrazia hears the roar: the sound of taxpayers agonizing over their RRSP strategy. More Canadians are beginning f0 discover that every dollar invested in an RRSP is a dollar that isn't taxed. According to Statistics Canada, one- third of eligible Canadians contribute to RRSPs. Many are seeking financial advice, or using tax software with bult- in RRSP optimizer tools that help max- imize contributions. "There are two common mistakes peo- pie make with RRSP contributions," notes DeGrazia. "The first is they exceed their RRSP contribution roomn and subject themselves to penalties." "The second mistake is that the high- er-income spouse does not maximize his or her RRSP contributions while at the same time the lower-income spouse makes contributions. If fhey are in different tax brackets, it usually makes sense for the higher-income spouse to contribute to a spousal plan -as long as they have contribution room - and thus get a higher deduc- tion." With taxpayers looking to take control of their finances, here are some more points f0 keep in mind: What can you deduct? - The amount you can confribute to your RRSP is based, in part, on a par- centage of your previous year's earn- inga and any unused RIRSP deduction room carried forward fromn the previous year. Your RRSP deduction limit is shosen on your notice of assessment or reasseasment for the previous tax year. - The more complete fax software packages, such as QuickTax or QuickTaxWeb (www.quicktaxweb.ca/ info), aufomafically carry forward your previous year's fax data. They also have features that let usera test RRSP contribution scenarios, helping users determine how much f0 contribute f0 maximize their refund Tools f0 help maximize your RRSP - The better fax software packages offer RRSP optimization and analysis fools that help users make the mosf of their contributions. For example, the QuickTax Scenario Analyzer alloss users to compare numerous "whaf if?" contribution scenarios, and select the version thaf delivers the maximum refurn. QuickTaxWeb off ers a free online RRSP calculafor - go f0, www.quicktaxweb.cainfo f0 optimize your RRSPs for free. - Don't have the cash f0 make a contri- bution? RRSP contributions can be cash contributions or other types of contributions; so, instead of confribut- ing cash, you can fransfer "qualified invesfrns" from an invasfmenf f0 an RRSP account, and receiva a fax receipf for the contribution. Hoseever, fax analysf Dalene Baron cautions, "Be careful when transferring investmenfs info your RRSP as invesfmenfs that have dropped in value since purchase wiul have a losa thaf you will not be able f0 dlaim if fransferred into an RRSP." -Wîf h current intereaf rates so low, the benefits of borrowing f0 contribufe 10 your RRSP have neyer been better. You can borrow for your enfîre annual contribution, or f0 top up the amount you're able 10 contribute on your own. This is also a greaf way f0 catch up on unused RRSP contribution roomn from pasf years. Just remember thaf inter- est paid on ftha ban is nof fax deductible. - Many employers will match a per- cenfage of the contributions you make. If you're confribufing f0, a RRSP on your own insfead of through your com- pany's plan, you may be missing ouf on some extra savings. - Keep in mmnd, the deadline for mak- ing contributions is normally 60 days after the end of the year. One more f ip from DeGrazia: "The sooner you make your RIRSP contributions, the sooner you sfart earning tax-deferred income inside your RRSP plan." More information on QuickTax is avail- able online af www.quicktax.cafinfo. (NC)-Altamira offers a number of interac- tive financial calculafors f0 help you gef a baller idea of how much f0 contribufe f0 get the lifestyle you want, how much fo borrow, and whether f0 pay off the mort- gage or confribufe fo your RRSP. More information is available at www.altamira.com for: MelISSa DebroUWer, CFP Certified Fvanca Planne, ,ienmoujecwb,,kfl flnfli i Cern - RRSP Calculafor - sea how much you need f0 earn or confribufe f0 build a com- fortable nesf egg, based on a number of factors; - RRSP Loan Calculafor - figure ouf what an RRSP boan will cosf you, either in pay- ments or infereat charges. Creating tax deduCtions while building an investment portfolio ail af the same time. Wondering how? Ask us today about how to get started. 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CISC ISI is a CISC subsidiary and Membert Reaching your current and Iong-termn financial goals i5 easier when you have a Financial Advisor who, works with you to build and maintain an up-to-dlate retirement plan - complete with RRSP solutions that are tailored to your personal situation. Take advantage of CIBC RRSP Portfolio Solutions and enjoy the freedomn from making day-to-dlay investment decisions with: " A tailored, diversified portfolio based on your individual investor profile " Access to the expertise of world-class investment managersi Portfolio diversification to, minimize risk For clear, objective advice Steve Raid, CFP, FMA that's right for you, give me a Financial Advisor caîl at (905) 878-6265 at our CIBO Investor Services Inc. 400 Main St. E. location. ppropriate for individuals witn household investable assets greater than $100,00. CISC Imperial Service is a par Ets and services are provided by CIS C. CISC Investor Services inc. ("CIBC ISIl) provides investerent and brokerag CIPF.« For wbat matters." is a TM of CIS C. Vi tegistered trademark of CIf C. Imlrademark of CISC. Calculate pur f ina'ncial future KNOW MORE - CARE MORE - DO MORE Make your mortgage tax deductible. We can manoeuvre your mortgage, Investment advice for today and tomorrovv.,ý-^ CIBC CIBC imperial Service For vvhat matters. F m (J E X