How do I show and hide the advanced worksheets?

The advanced worksheets are hidden by default to make the spreadsheet less intimidating for new users. To show and hide the advanced worksheets use the Show and Hide buttons on the Start Here Worksheet.

Is there a way to minimize taxes?

Everyone wants to pay less tax, but the ultimate goal is more money in your pocket. The spreadsheet's basic Estate optimizer takes a lifetime approach to maximizing the value of your estate after all taxes, including final estate taxes, are paid. This will likely have the side effect of minimizing taxes, but again the focus is on maximizing estate value, not minimizing taxes. Running an estate optimization is a sub-step of the other basic optimizers.

Can I control which accounts the spreadsheet deposits to and withdraws from?

The spreadsheet attempts to withdraw and deposit funds in the most tax efficient way possible. 

The drawdown of accounts is done in an attempt to minimize your tax burden. The order of drawdown is as follows:

1. RRIF and LIF minimums (required by law)

2. Discretionary RRSP/RRIF and LIF withdrawals as dictated by the withdrawal strategy and suggested amounts you (or the optimizers) have selected

3. Savings in excess of your emergency fund

4. Non-registered investments

5. TFSA

6. Your emergency fund

7. Overdraft (you have gone into debt)

Excess discretionary funds (beyond your budget, charitable donations, taxes and loan payments) are allocated in the following order

1. Repaying any overdraft

2. Paying down any consumer debt

3. Making your RRSP contribution as dictated by the contribution strategy and suggested amounts you (or the optimizers) have selected

4. Establishing or topping up your emergency fund

5. Making your TFSA contribution

6. Deposits to your non-registered account

You cannot change this order but you can influence the amounts by specifying the RRSP Contribution Strategy and Suggested Withdrawal and Retirement Fund Withdrawal Strategy and Suggested Withdrawal. If you run an optimizer, these will be selected for you.

On the Snapshot Worksheet, why are the tax amounts not the same?

To understand this, you must familiarize yourself with three concepts:

1. Prepaid tax is tax paid through payroll deductions, withholding tax when you make an RRSP withdrawal and instalment payments CRA may require you to make.

2. Assessed tax is the total tax due for a given tax year and is calculated on the tax return you file in April of the following year.

3. Reconciliation is the difference between your Assessed tax and Prepaid tax for a given year. It is also calculated on your tax return and results in additional tax owing or a refund.

From a cashflow perspective in any given year, you pay Prepaid Tax for that year and you receive or pay a Reconciliation for the previous year. The total of these two is shown in the Expenses column in the Income and Expenses section.

Your estimated Assessed tax for the current year is shown at the bottom of the Income and Expenses section. Some of this will be paid as Prepaid tax in the current year and some in the following year when you file your tax return.

The spreadsheet uses your Assessed tax from the previous year as an estimate for Prepaid tax in the current year. This is usually a good estimate except when your tax situation changes significantly, for example when retiring or selling an investment property with a large gain. From an overall projection perspective, this is not too significant because the spreadsheet will sort out the taxes within a year or two.

Please note that the spreadsheet is not a substitute for a tax program or accountant. Only the most common tax credits are calculated and your tax situation may be significantly different.

Is the Guaranteed Income Supplement (GIS) supported?

No, the spreadsheet does not support the GIS. If you are using the spreadsheet it is likely that you have sufficient means to not need the GIS.

There is a tax strategy whereby people lower their taxable income from ages 65-71 by deferring CPP and OAS and paying expenses from their non-registered funds and TFSAs in order to qualify for the GIS. The GIS is intended for low income seniors and the ethics are questionable when someone with means accesses the program. The government may close this loophole in the future and it would be unwise to plan for it.