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20.0 Terrace Review —- Wednesday, February 12, 1992

ta

» Auditing
» Accounting

CHARTERED ACCOUNTANT ae
ee << ) ) e
- ~ a ‘Member of the Institute of
Ts . Chartered Accountants of B.C. —

~ Providing Services in the following areas:
“»~ Income Tax Consulting

‘ Management Consulting
Data Processing

$304 = 4546 Park Avenue |
Terrace, B.C.

Temporary tax marks

75th anniversary...

(NC)}—The First World War was raging,
and the government had just raised a
call to action; 100,000 additional men
were shipped overseas to fight the
battle. In order to pay for this, and to
finance the repair and- expansion of
Canada’s fail system the government
needed another source of revenue.

Hitherto it had relied mostly on duties

- from customs and excise, postal-rates |

- and other miscellaneous sources.
The ‘B.N.A. Act empowered the

federal government to raise revenues

_ by any mode, direct or indirect, if such: .
action was deemed necessary: In

1917. it was, and so income tax was

introduced as a temporary war-time |
-Teasure: It was passed as only. one of -
‘a number of important bills looked'at
by the Parliament which opened in

January of the same year. © :
- Tronically while they both had
many more significant consequences,
income tax and legislation giving

- women the vote, were overshadowed

—11°5 YOUR——
=" HISTORY

by the Military Services Act, or con—
scription bill, which was seen by
everyone at the time as being by far
the most important’ issue facing the
country, =

A business profits war tax act had

. -been put in place at the outset of the

war. Care was taken to avoid double
taxation (since dividends were already

‘being taxed). A personal income tax

of 4 per cent, with exemptions of $2000
for singles and $3000 for married
couples, was levied. A graduated super—

‘tax: ranging. from, 2-25 per cent -was

“salsd change of thosé with high incomes. ™

Thanks to the National Archives
of Canada, documents which details
every aspect of Canadian life, including

‘this very taxing one, have been
preserved so that interested Canadians
can use and learn form them.

What isan RRSP? .

m (NC}—An RRSP, ora. Registered [7 - “s

j Retirement Savings Plan, is a special :

kind of tax’ freé. savings plan. When

& you contribute money. ‘to an RRSP, .
i you are investing part-of- what you
§ earn today, before tax;:for your use in
s the future. Ss

FIVE POWERFUL
REASONS
 TOGETA
MUTUAL RRSP
NOW
“Save with confidence. -
. Mutual has highest credit
ratings
«New Loan Service - up to
12 months to repay
*Wide range of savings and
investment options
*Attractive interest rates
*Transfer your RRSP to
Mutual and get much more

Don't delay!
Get your RRSP by Feb.29

Ré The Mutual Group}

“Facing Tomorrow
Together

I~-Frank Doriahue”
 Skeena Mall
- Terrace
phone 635-2387

By JOANNE POOLEY, CA

Some people have. difficulty
sorting out the difference be-

tween. renting and leasing a
car. ,

“Many rent cars for weekend
jaunts or when a bigger car is
needed for a wedding. That
simply involves shopping for
the best deal. The rental firm
takes the risk and the respon-
sibility for maintenance.

- But leasing is different, You
face a more serious financial

|} decision that involves choos-

‘ing from the many leasing ar-
“‘yrangements in, the

; ‘marketplace and weighing

them against conventional

‘Tl Pank loans or using capital.

Right away you find the

‘main difference is you assume

‘all the risks along with main-

- || tenance ‘and repairs. If you
I get a lemon, the problem is
|/-yours, the same way it would

be if you bought the car.

| : “down pay-
merits offered result from the

: Jonger term. and: estimated

‘resale value of the car at the

“Thénd of the contract. This,

kes leasing séem an at-

ttive alternative to bank —

~ | - Leasing also.is.for the long |
dV term,- usually two to five

‘|[ years. The sthaller monthly
Il payments. and

Examine all financial details
before you s

-

loans. Bankers want you on
the hook with them, so they
demand larger downpay-
ments. Monthly payments
also are larger because bank

loans are for three years in-.

stead of the longer terms leas-

ing companies give. =

Establish

true rate
But you should look for the

true interest rate in your leas-

_ ing contract. The company

isn’t required to disclose it,

vide you with the rate upon
request. You will usiially find
it is higher.

‘Lifestyle and a person's oc-
cupation play a large part in
the decision. Many running
their own small business

ign a car lease

. tach other assets.

the contract.
_ whereas you can only deduct

_ Jeasing companies and many.

is an important financial

but reputable ones will pro-.

lease so capital ean be used

for expansion. The lease is not
considered a debt which
means you can get a larger
business bank loan. If you
finance, the bank will also at-

That poses a threat to your
business if you can’t keep up
the payments. Ifyou are leas-
ing, you simply turn the car in
and pay the penalty that ran-
ges from three months’ pay-
ment to the balance due on

Leasing can also have some
tax advantages, allowing you
to write off the entire amount,

a set rate for depreciation if
you own the car.
But there are many kinds of.

kinds of leasing contracts. It

decision, so you should sho
around to be sure. a

Leasing may suit your life-
style. Many high income’
people prefer to lease rather
than tie up $35,000 to $40,000
in acar. That may be why you
see so many sporty cars these |
days, that cost as much as you
once paid for a house. .

Joanne Pooley is ‘with Xerox

Who ‘can. buy an RRSP? Any

person can ‘purchase an RRSP with
J employment earnings, income from a

business, alimony, ‘or rental income.
However, some types of income such

‘as pension and deferred profit sharing
t plan income, ‘investment | income,

capital gains, and.retirement income
cannot be used to purchase RRSPs.
“ ‘What is the purpose of an RRSP?

-An RRSP jis.a tax shelter that allows .
| you to postpone, .or defer, paying -
a income tax on the’ money that you
B contribute to the plan. "An RRSP is
8 also a means of encouraging -you to
| save money for your retirement, when,
Z you expect your income to be lower. .
s. Where can you purchase an

RRSP? You can purchase RRSPs

from Trust Companies, Banks,
Insurance Companies, certain Stock.

Everyone knows ‘it’s best to

A pay off Visa and -MasterCard
S bills in. full. ievery.,jmonth::.to

avoid interest charges. But only

a about half of us manage to’ do

so, according to Consumer and
Corporate Affairs Canada,
- Still, there are ways to mini-

‘mize interest costs for the rest of

‘us, The Canadian: Bankers’ As-
sociation has issued — these
reminders: —

‘Frequent payments make
sense: If you can’t pay your
balance in full by the due date,
frequent payments. between duc
dates can reduce interest charges

on each day’s balance from the

your account. a

*New purchases: | Purchases
don’t cost interest on the state-
ment on which they. first appear.
If the account isn’t paid off in

full by the due date, interest is

considerable. They’re calculated

day the purchases were posted to:

by Brigitte Goulard |

Brokers and Mutual Fund Companies, .

Credit Unions and Caisses Populairés. .
Can ¥ take my money out before .—

_ retirement if 1 need it? RRSPs can

usually be cashed in at any time you . -

wish, but funds withdrawn will. be

~ taxable in the year that withdrawal .. ~

occurs. In onder to take full advantage.
of ‘all the tax. benefits, you should
only withdraw the funds when you
absolutely require the money, when
you require retirement income, or in
tlie year you tum 71. To avoid paying

the deferred income tax on your. |
_ RRSP, you must transfer the money

into another plan such as annuities

or Registered Retirement Income.
‘Funds (RRIFs).

’ To learn more about RRSP visit a
branch of your local trust company.

This article was prepared by the Trust .
‘Companies Association of Canada.

|Minimize credit card interest

charged retroactively to the date ~

of posting regardless of any
partial:payment you might make.

Payment "application: Partial.

payments are applied to the
items in your outstanding bal-
ance in order noted on the back
of your account statement.

Cash advances: Interest.begins

from the day you receive the.
money and it continues to grow

until it is repaid.

Consider switching: If you’re
carrying a large credit card

palance over a period of months,

another type of loan might save |

you money. |

«Know where you stand: Don't
operate in the dark. Don’t end

up with unpleasant surprises.

‘Your bank staff can help you
-understand how interest is calcu-

lated and can often make recom-
mendations to help reduce
charges.

. See the

Canada Finance Inc.

' A major Canadian “bank surveyed clients
purchasing RRSPs or in Registered company
pension plans. The survey revealed that over

22% did not have a valid will. -
- Do you? —

\

- Secure your family’s future
. expert,
_... G.W. Wayne Braid jf
NOTARY PUBLIC’ mae

| Mo 4648 Lakelse Avenue, Terrace |
. © phone 638-1965 |
fax 638-1361

RR$Ps |

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