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Author Archives: Terry Zavitz

Life Insurance & Changing Tax Law – What is All the Noise About?

Terry Zavitz

Terry Zavitz

The 2016 proposed federal budget and introduction of changes relating to life policies issued January 1, 2017 and beyond are the focus of many articles, most of them hard to understand due to the technical jargon needed to explain these changes. The result has been a preponderance of rumors. What is all the noise about and what changes should you care about?

The proposed 2016 federal budget contains 3 provisions that affect the taxation of death benefits of existing and new life policies that are corporately owned, whether the corporation is an investment, professional or active business. They are complicated, but in reality, affect very few of these policies. The changes represent a desire by the federal government to clean up sections of the Income Tax Act (ITA) that resulted in preferred taxation i.e. they closed some loopholes. Unless your corporation owns a life policy that was previously transferred into the corporation at its fair market value (FMV) or the beneficiary of the policy is a different corporation, there is likely no change that you need to be concerned about, or better still, try to understand. If any of the two scenarios apply to you, call your insurance advisor to discuss.

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Marijuana and the Insurance Industry

 

Terry Zavitz

Terry Zavitz

With the 2014 changes to the Marijuana for Medical Purposes Regulations, and the recent election of Justin Trudeau who included, as an election promise, to legalize the recreational use of marijuana, it appears the road to a liberalized approach (no pun intended) to the use of this drug is opening up. But what are the repercussions from an insurance perspective? The landscape is much more complex in this regard.

Here’s what you need to know:

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Personal Tax Rates – Are You Paying More or Less in 2016?

Terry Zavitz

Terry Zavitz

One of Justin Trudeau’s election promises was to lower income taxes for the middle class and raise them for the wealthy, an election promise that he has made good on. The federal income tax rate for income between $45,282 and $90,563 was cut from 22% to 20.5% and the rate for income above $200K was increased from 29% to 33%.

The actual savings or cost to you depends on a few factors, but mostly on how much you make and which province you live in. With provincial taxes added, New Brunswick stands on top with the highest marginal tax rate of 58.75%, while British Columbia is the lowest at 47.70%. Ontario falls somewhere in the middle at 53.53%.

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Ho Ho Ho… The Good, Bad & Ugly

Terry Zavitz

Terry Zavitz

 

The holiday season is soon upon us, typically a time for family, friends and giving. While it is a “glorious time of the year”, it is easy to get caught up in the joy of giving to the point that the end of January is a miserable time. The reality of extra expenditures is apparent when the credit card bill comes in and the bank account is at a low point. You can avoid this ugly situation by taking a few simple steps:

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Mortgage Shopping: It Can Save You Thousands but Don’t Forget the Insurance

 

Terry Zavitz

Terry Zavitz

Recently I had a client who was renewing the mortgage on a commercial property that she owned. She accepted the bank’s terms thinking that as a long-time customer they would give her the best rate. She quickly learned that a better interest rate was available with a competing bank and the difference would save her $10,000 of interest payments over 5 years. Luckily she had not officially agreed to the initial rate and she was able to negotiate an even lower rate than the competing bank was able to offer, saving her almost $13,000 in interest payments.

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