Santa has a list, but does he have a plan? Financial planning tips specially created for Santa Claus from RBC

Santa has a list, but does he have a plan? Financial planning tips specially 
created for Santa Claus from RBC 
TORONTO, Dec. 18, 2012 /CNW/ - At this time of year, Santa Claus is 
understandably busy with pressing global priorities. However, the end-of-year 
period is a particularly crucial time for financial planning. That's why RBC 
would like to offer the "jolly old elf" some financial planning tips 
specifically tailored to his unique financial needs and lifestyle. 
"Santa is not only Canadian, he is also a prominent philanthropist, business 
owner, senior citizen, extensive traveler and last of all, a taxpayer. This 
makes his financial planning needs highly unique," said Richa Hingorani, 
regional financial planning consultant, RBC Financial Planning. "Because of 
that, he needs to take into account several taxation and financial planning 
considerations this time of year as do many Canadians, regardless of whether 
or not they celebrate Christmas. That's why we've come up with this handy list 
so he can focus his attentions on more important issues this season." 
1. Charitable donations. Santa is one of the world's most prominent 

     philanthropists. Fortunately, most of his donations will be made
     by the December 31 deadline so that credit can be made on his 2012

 tax return.
  2. Income Splitting. This is an important consideration as Mrs. Claus 

     is not (as far as we know) employed. Santa might want to consider
     income splitting with Mrs. Claus to minimize his annual tax
     liability by using a prescribed rate loan to Mrs. Claus. Depending
     on the amount loaned (the current interest rate is one per cent),

 the amount of tax paid by Santa could be substantially reduced.
  3. Avoid the Old Age Security (OAS) Clawback. Santa's OAS will start 
 to be clawed back once his 2012 income reaches $63,511.
  4. Santa does extensive travelling. Because of that, he needs 

     out-of-country travel insurance for his Christmas Eve flight. He
     should also consider out-of-country medical insurance, just in

  5. If Santa has made investments, the last trading day to ensure 
 losses can be used to offset gains from this year is December 24 
 for Canadian transactions and December 26 for U.S. transactions.
  6. Is Santa getting ready to RRIF? If Santa has yet to turn 71, he 
 will need to start drawing down his RRSP in 2013. The minimum 
 withdrawal amount will be 7.31 per cent.
  7. Santa is an (incorporated) business owner with an eternity of 

     active years ahead of him. As such, he should consider opening an
     Individual Pension Plan (IPP). An IPP is structured to provide tax
     relief for the corporation and enhanced retirement savings (more

 than an RRSP) for Santa.
  8. Santa will need some hard-earned relaxation after the holiday 

     season. As a Snowbird heading south for the winter, he will need
     to keep in mind that if he should stay in the U.S. for more than
     183 days in two consecutive years, he may be considered to be
     liable for U.S. income tax.

About RBC's financial planning advice, resources and interactive tools
The RBC Advice Centre offers free online advice, resources and tools regarding 
retirement and estate planning including RRSPs, the RSP-Matic(®) Savings 
Calculator. Whether Canadians want to save and invest, buy their first home, 
get more from their day to day banking, protect what's important, or take care 
of their businesses, the RBC Advice Centre can help answer their questions. In 
addition, RBC's myFinanceTracker, a comprehensive online financial management 
tool, offers all personal RBC online banking clients the ability, at no cost, 
to create a set budget and track their spending habits and to access 
tax-related apps in the myTax Centre, to help manage and plan their taxes.

Kathy Bevan, RBC, 416 974-8820 Kate Yurincich, RBC, 416 974-1031


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CO: RBC Royal Bank
ST: Ontario

-0- Dec/18/2012 10:00 GMT

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