Thursday, February 9, 2012

Using Online Resources To Better Your Finances And Business, Part 2

Although You Tube is a resource, there are numerous other online resources that you can use.  I will give you a few of the ones we and people we are connected to use often.  First of all, if you want updated tax news, tax tips, tax strategies and all to do with tax in Canada, you can check out our blog at There are new blog posts several times a week so please do visit our website to get the latest tax news.  You can also go to for more tax updates.

For Stocks and investing, you can use yahoo finance, MSN money or Google Finance.  For education in the area of stock investing, you can go to where you will find Phil Town’s teaching on investing using Warren Buffet’s number 1 rule – never lose money.  If you are looking for a list of Stocks that have D.R.I.P.s (Dividend Reinvestment Plans) you can go to for drips in Canada, and for companies that offer both D.R.I.P’s and S.P.Ps (Stock Purchase Plans) in Canada you can go to  If you are looking for U.S. D.R.I.P.’s, you can go to

The list of online resources goes on and on.  For budgeting you can go to various websites that offer budgeting tools, such as  If you are looking at getting out of debt, there are sites that will help you track your debt. Again, whatever you goal is, you can look at using online resources to help you, but remember the key is to ensure you are diligent in verifying it is a trusted site!

Keep checking our blogs here on this site and at as we continue to educate and provide resources for you!

It is also important to remember that Kustom Design can also be your online resource for all things Finance and Tax.  Aside from our blogs, you can also send us your tax questions or concerns by email at  Our tax experts will gladly assist you and provide you with the answers you need! 

Tuesday, February 7, 2012

Using Online Resources To Better Your Finances And Business, Part 1

The other day I met with a client of ours that does their own bookkeeping and we were reviewing her bookkeeping file and found that the bookkeeping was done quite well.  When she incorporated in mid 2011, she did not know how to do bookkeeping and when we let her know we have the option of bookkeeping in our accounting packages, she hummed and hawed.  After a bit of conversation, she decided that she wanted to try it on her own.  Now just over 6 months later we reviewed her bookkeeping and found that the bookkeeping was done well!  Because most people that don’t know how to do bookkeeping take awhile to catch on, I was surprised that she learned and caught on so fast.  I asked her how she did it, and her answer…”I learned how on You Tube.”  I looked on and found that there were tons of tutorials on Quickbooks. Wow, it’s true you can learn off Youtube!

I shouldn’t have been surprised as I’ve used You Tube to learn how to do specific things in the music studio.  You Tube can be a great resource, so don’t hesitate to use it.  The key to learning from the internet is to check your source and verify its accuracy.   Search more than one site as you can’t believe everything on every site!  There is truth and lies all over the internet, so go to trusted websites and when you are unsure use google to search and find other websites and what people are saying to confirm it is a trusted site, video, blog etc.

I’ll continue my blog on using online resources to better your finances and business on Thursday.  Please watch out for that.  I will discuss more resources you should know about such as useful blogs on finance and taxes and useful online links for stocks and investing!   

Tuesday, January 24, 2012

RRSP’s – What are they & Are they good or bad? Part 4

So let’s now breakdown some of the Goods and Bads of RRSPs, starting with the Goods:

Good facts about RRSPs:
1.    Tax Deduction in the year you contribute
2.    Long Term Growth of Investments
3.    Deferred tax on Growth of Investments
4.    Forced Savings program

Bad facts about RRSPs:
1.    You are eventually taxed
2.    There is a limit on how much you can contribute (may be a good)
3.    Unlike other investment vehicles, you cannot use RRSPs as collateral
4.    You are restricted as to what you can invest in
5.    There are age and income restrictions to RRSPs
6.    Government is in control of the rules
7.    RRSPs are in trust for the government
8.    You cannot receive the tax favorable benefits of Capital Gains and Dividend Income inside of an RRSP
9.    You cannot deduct investment losses on your taxes
10. You cannot deduct interest and carrying charges if you borrow money to invest in an RRSP

This gives you an idea of some of the main Goods and Bads of using RRSPs.  Your bottom line is that you need to plan thoroughly to decide if using RRSPs is for you or not!  Again remember the key if you are using RRSPs is to contribute when your income is high and withdraw when your income is low.

If you are contributing to RRSPs definitely consider using a self directed RRSP as there are many advantages.
  Also if you are considering withdrawing from your RRSP, do it in increments of $5,000 or less as the withholding tax is lower.  The key in withdrawing an RRSP is to have a tax plan.  Kustom Design can help you plan a tax effective RRSP withdrawl if this is what you are looking at doing.
There are many more strategies available with and without RRSPs so do come plan with Kustom Design to ensure you maximize your potential and minimize your tax.  Some of the other things you can look at is using your RRSP to give yourself a “Self Directed Mortgage”, where your RRSP holds your mortgage!  Other strategies could be tax shelters and flow through shares.  Come take our Financial Boot Camp to learn more about all of these topics and more.  You can sign up for the Financial Boot Camp on our website at

Thursday, January 19, 2012

RRSP’s – What are they & Are they good or bad? Part 3

RRSP contribution limits are calculated annually on your “earned income”, not passive income, and show up on your Notice of Assessment.  Always know your contribution limit before contributing, because if you over-contribute you will get penalized and have to pay for it!  If you are unsure of your contribution limit you can always contact CRA to get it.

Another interesting fact about RRSPs is that you don’t have to contribute cash.  You can contribute stocks or securities that you already own.  They key is that they must be RRSP eligible investments. 

There is so much to learn about RRSPs…let’s go on.  You can also take a withdrawal from your RRSP to purchase your first home.  This is called the Home Buyer’s Plan.  You are not taxed on this withdrawal, but must pay it back over the next 15 years, or claim it as income over the next 15 years.
There is also something called the Lifelong Learning Plan (LLP), you can withdraw up to $10,000 a year, or up to $20,000 in total each time you participate in the LLP to help pay for your education. All you have to do is repay at least 10% per year for up to ten years.  Participants must start to make repayments two years after their last eligible withdrawal, or five years after the first withdrawal, depending on which due date comes first. Amounts withdrawn must be repaid within 10 years.

RRSPs are one of the few “after the year” tax planning opportunities that the government allows.  You can contribute to an RRSP for up to 60 days after the end of the calendar year and still have it qualify for that calendar year.  This is an interesting factor as you can contribute to your RRSP in February 2012 and get a tax deduction for 2011.(an example)  Why would the government allow this?  There are a few reasons, such as RRSPs can bring out hidden money into the financial realm which earns income for financial companies, and those financial companies pay tax on the revenue generated.  Also we must keep in mind that RRSPs are actually in trust for the government.  If the government were in a position where they were collapsing financially they could take all the RRSPs as they are in trust essentially for the government if they need them!  …This is of course a scary thought, but it must be considered!

Tuesday, January 17, 2012

RRSP’s – What are they & Are they good or bad? Part 2

There are many other things to consider in deciding whether or not to do an RRSP.  You must understand the basic concept of an RRSP from a tax perspective.  When you contribute to an RRSP you get a tax deduction, then when you pull the RRSP out you are taxed on that as income.  So therefore, you may not be saving tax when you contribute to an RRSP, but rather deferring tax.  The key to saving tax if you decide to do an RRSP is to contribute when you have high income and pull out the RRSP when your income is low.  You would not want to contribute into an RRSP in a low income year.  Also if you have a plan that will continuously provide high income later in life, then RRSP’s may not be good for you.

Basically there are 2 sides to the RRSP, the tax deduction (which we just discussed) and the investment side.  Once you make the RRSP contribution you can now invest the money from within your RRSP.  You can either have someone that is licensed invest it for you, or you can set it up as Self Directed RRSP and invest it yourself. 

Another thing to understand is that some RRSP’s are locked in and some or not.  This is typically a choice that must be made.  Unless you have a specific purpose for locking in the RRSP, then you are best to go with an RRSP that is not locked in.  If your RRSP is locked in then you will not be able to withdraw it until you are in your elder years (currently 71) and can transition it into a RRIF (Registered Retirement Income Fund) 

Although the majority of people that do RRSPs contribute to their own RRSP, you can also contribute to a spousal RRSP which gives you a tax deduction, but allows your spouse to withdraw it later on.  The other main type of RRSPs is group RRSPs, which are typically contributed to through employment arrangements and are deducted off of paycheques.