The most wonderful time of the year!
We’re almost there! As hard as it is to believe, 2018 is coming to a close, and with time flying by we wanted to take a moment to send you our warmest holiday greetings:
Best wishes and a Happy New Year to all our loyal customers and friends, from the entire Oaken family!
We’d like to take this opportunity to once again thank you for choosing Oaken. We’re very proud to have served you throughout the year, and always take great pleasure in helping you plant for your future. We look forward to providing you with the service that will help you achieve your financial goals in 2019 and beyond.
As usual, we’ll be taking a few days off to celebrate with family and friends. But if you need anything done before the end of the year, feel free to call us or drop by one of our locations. Please be aware that our stores, offices and customer service centre will be closed for the public holidays of December 25, 26 and January 1, and also closing early at 1:00pm on both Christmas Eve and New Year’s Eve. But aside from that, it will be business as usual. So if you’re nearby one of our locations, please come and visit us for a coffee and a chat.
And don’t forget, you can always get in touch with us through our customer service centre by calling 1-855-OAKEN-22 (625-3622), plus of course Oaken Online Banking and our website are available around the clock on every day of the year.
Wishing you all the very best during this happy festive season!
Charitable giving for 2018
Not only is giving to charity a great feeling, but it also has tax benefits. You can claim a tax credit of up to 29% at the federal level, and an additional amount of up to 24% depending on where you live in Canada. Here are some of the basics that you should know if you plan on making a donation before the end of the year:
- You can only claim a credit for a donation to a registered charity or public organization. If in doubt, check the Canada Revenue Agency website for its searchable database of registered recipients.
- You claim your credit by reporting the donation on your federal tax return. You’ll receive 15% for the first $200, followed by 29% for the rest. Similar credits are available at the provincial level, varying between 4% and 24%.
- If you haven’t made a donation since 2007, you’re eligible for the First Time Donor’s Super Credit. This has been available since 2013, and it gives you an additional 25% on the first $1,000 in donations.
- Given the higher credit for donations over $200, you may want to accumulate donations to get over that threshold. You can wait a few years to accumulate a large amount that you then claim in one year, and you can also combine your donations with your spouse’s to receive the greater credit. Donations can be transferred between spousal returns.
- The deadline for making a charitable donation that you can claim on your 2018 return is the end of the year, but you may want to donate well before December 31 to ensure the recipient processes your donation and issues a receipt in time.
Other year-end deadlines
Here are a couple more important financial dates to remember this month:
- December 27 is the last day for buying and selling Canadian securities to be settled in the calendar year of 2018. Consult your financial advisor about the potential tax advantage of crystallizing a capital loss on securities.
- December 31 is the final day for converting your RSP into a RIF if you turned 71 this year. Remember to think about contributing to your RSP if you still have unused room available. You may also want to make a contribution based on any income you earned in 2018. This will generate contribution room for 2019, and while you’ll have to pay a penalty of 1% for that December 2018 contribution, you should earn more than that back on your 2019 return.
Year-end tax selling
With 2018 winding down, now is a good time to look over your investment portfolio and think ahead to 2019. An important thing to consider is whether or not you want to sell some investments, and if so, when would be the best time to do that.
From a tax perspective, selling before the end of the year can have a significant advantage. The main benefit of this comes from recording a capital loss. Essentially, if you have an investment that is worth less now than what you paid for it, then you have a capital loss. That loss is only crystallized, however, once you sell the asset. If you hold on and it recovers to the original price (or hopefully more!), then you can no longer make a claim.
Buy and hold, or sell and buy?
Selling the asset is a decision that will be driven by a number of factors, such as your overall asset allocation, your cash needs, and how well you think the markets will do over the coming year. If you need income now or in the next few months, then selling before the year ends might be a wise approach. In addition to providing you with a lump sum, it would allow you to claim the capital loss on your 2018 taxes, which will lower your overall tax bill.
But what if you’re an investor who follows a “buy and hold” strategy? Under that approach to investing, you typically hold on to investments through good and bad, with an eye to making money over the long term. The fact that your investment is down this year isn’t of itself a reason to dump it now and move on to something else. However, there could be a case to be made for selling now, even if your philosophy is to hang on for the long term.
First of all, you could opt to sell the investment now, and then buy it again later. This scenario means you would trigger the capital loss and claim it on your tax return, but still hold the asset. However, be careful, as you could only do this if you wait at least 30 days before repurchasing the investment! If you sell a stock or mutual fund in under that time, the Canada Revenue Agency (CRA) views your action as having created a “superficial loss”, and it will disallow it for tax purposes.
A second approach you could take is to sell the asset, and then buy one that is different but very similar. If you own a gold mining stock, for example, you could use the proceeds from the sale to buy a completely different gold miner, or even invest in a gold sector ETF. The CRA will not view the loss as superficial, so in this case you’d be able to claim it for tax purposes while still retaining gold exposure in your portfolio.
Finally, as we always like to remind you, we don’t provide investment advice at Oaken. As this is a tax-related issue, you should always be sure to discuss it with an accountant or financial advisor.
Find a new hobby in the kitchen
Nothing says holidays like food, so if your thoughts are gravitating more and more to things delicious this month, you’re not alone. But our preoccupation with food is no longer something just seasonal. Over the last decade or so, food has become a minor obsession in our culture. For example, 80% of adult Americans now watch cooking shows at least once a month, and in under a decade (starting in 2005) the number of competitive cooking shows on the Food Network went from two to 16.
Another sign of our foodie culture is cooking classes. These are especially appealing if you want to eat better, or are just looking for a new hobby—and once you start looking, you’ll find them everywhere! They’re also truly democratic, because they’re open to everyone and welcome all skill levels. Some are even offered at professional chef schools, where you can take classes that are just like the ones that chefs complete as part of their professional training. Here’s where to look:
Community colleges: All those bakers, chefs and sommeliers have to get their start somewhere, and usually it’s at a community college or trade school. To generate extra revenue from their teaching kitchens, many of these institutions offer cooking classes to the general public as part of their Continuing Education program. Their great advantage is the wide array of classes that will allow you to learn everything from how to cook Thai to how to make your own chocolate. In addition, you’ll be learning alongside other amateurs, not the pros.
School boards: Your local school board is another potential source for cooking classes. Boards that offer Adult Education like to include a culinary component in their nighttime curriculum, because cooking is so popular. The choices won’t be as extensive as they are at a community college, but they’re generally much cheaper.
Private schools: In some larger cities you can find private chef academies and culinary businesses that offer classes to non-professionals. These tend to be much more expensive than your other options, and the quality can vary considerably. One thing you’ll want to enquire about before enrolling is how large your class will be. Classes with lots of students offer less interaction with your teacher, and won’t be as enjoyable as those with fewer enrollees.
Restaurants and food stores: Bakeries, chocolatiers and restaurants are always trying to drum up business, and what better way than by advertising yourself through a cooking class? Classes offered through these establishments tend to be one-offs—an afternoon learning how to bake pie, for example—and are often a way for people to get out and socialize with others who share a common interest. A single class also makes a great gift idea at this time of year.
It’s time for a break from all that hard work in the holiday kitchen, so treat yourself to a festive drink and some bite-sized reads for the season…
- It wouldn’t be the holidays if we didn’t include an article about fighting weight gain during the holidays, so here you go!
- Some thoughts on charitable giving from a famous Canadian, via the Financial Post.
- If you don’t have time for cooking classes, the growing trend of meal kits is an alternative, as the CBC explains.