CPP, EI and Tax Rates for 2012

It is a new year and the new tax rates are in.  There were not a lot of changes from last year.  Most money ranges and limits moved with the government's inflation index.

Federal Income Tax Rates	2012	2011
Basic Personal Exemption	$          10,822	$          10,527
15% on the first:	$          42,707	$          41,544
22% on the next up to:	$          85,414	$          83,088
26% on the next up to:	$        132,406	$        128,800
29% on the income over:	$        132,406	$        128,800
Alberta Income Tax Rates	2012	2011
Basic Personal Exemption	$          17,282	$          16,977
Tax rate	10%	10%
CPP	2012	2011
Maximum Pensionable Earnings	$          50,100	$          48,300
Basic Exemption	$            3,500	$            3,500
Rate	4.95%	4.95%
Employee & Employer Max.	$            2,307	$            2,218
Self Employed Max.	$            4,613	$            4,435
EI	2012	2011
Maximum Insurable Earnings	$          45,900	$          44,200
Employee Rate	1.83%	1.78%
Employee Max.	$               840	$               787
Employer Rate	2.56%	2.49%
Employer Max.	$            1,176	$            1,101

2011 RRSP contribution deadline is February 29, 2012. The contribution limit is $22,450, although if you have not contributed to the maximum in past years you have additional contribution room. You can contribute to RRSPs until you turn 71 when RRSPs must be converted into something else like a RRIF (Registered Retirement Income Fund).  The limit for 2012 is $22,970.

2012 TFSA contribution room is $5,000. If you haven't contributed in past years you can contribution up to $20,000.

Banking Changes Over 20 Years

The ways that people access and use their money has changed a lot over the past twenty years. 

Twenty years ago the standard way to do financial transactions involved: going into your local branch during banking hours, waiting in a line, doing your deposits, transfers, bill payments, withdrawing your cash, and leaving to do your other business.  Bills were often paid by mailing a cheque, which usually took a few weeks to come out of your account, and if you ever wanted to pay for something without a cheque you had to go back to your branch again to withdraw cash during banking hours.

Today consumers have a variety of ways to do their financial transactions whenever and wherever they want, faster and more accessible than 20 years ago.  Between debit cards, online banking, mobile banking (using cell phones), e-mailing money, and ATMs.

In addition to the convenience and speed of these electronic services, the decrease in cheque usage has resulted in retailers receiving far fewer NSF cheques which saves stores both time and money.  Instead of waiting for cheques to be deposited, and hopefully not bounced, debit machines allow an instant transfer of cash from the purchaser to the retailer.

Safe Online Shopping

I posted the following advice over a year ago, but with so many more people shopping online this year I figured it would be worth re-posting.


Online purchases have grown dramatically over the past decade.  Whether you are looking for auto parts, books or even clothing, you can buy them online.  While many people want to see and touch the items they are buying, more and more feel safe about purchasing their goods over the internet.

 There are security risks, but if you follow the tips below you can have more confidence in your online shopping experience.

1. Make sure your information is being entered on a secure site. 
2. Look for the latest credit card password procedures
3. Know who you are buying from. Use stores you are familiar with or people you know have dealt with.
4. Beware of refurbished items, often a detail buried in small print.
5. Check the store’s return policies before you buy.
6. Use a separate credit card for online shopping, preferably one with a low limit in case the number gets stolen.
7. If the deal sounds too good to be true, it probably is.
8. Online deals can seem great, but what do you do if something goes wrong with the product?  Check out local retailers too as they can often provide faster service than the online merchants.

Christmas is coming, so if you are looking for a specialty item you just can't get nearby, feel free to do some online shopping, but keep safe.  Jerry

New Polymer $100 Note

Used with the permission of the Bank of Canada.

Ottawa, Ontario -

The Bank of Canada unveiled a new polymer bank note series today at its head office in Ottawa. Information on the polymer material and advanced new security features was released, along with the images and designs of the soon-to-be-issued $100 and $50 bank notes, and the themes for the remaining notes in the series.

Minister of Finance Jim Flaherty and RCMP Commissioner William J. S. Elliott joined Bank of Canada Governor Mark Carney for the unveiling ceremony.

Minister Flaherty spoke of the importance of cash as a means of payment in the daily lives of Canadians, adding this is why it is important Canadians see their story reflected in the designs. “These bank notes evoke the country’s spirit of innovation, and their designs celebrate Canada’s achievements at home, around the world and in space,” he said. “Bank notes are cultural touchstones that reflect and celebrate our Canadian experience.”

Tax Free Savings Accounts (TFSA) Info

The Tax-Free Savings Account (TFSA) is a flexible, registered general-purpose savings vehicle that allows Canadians to earn tax-free investment income to more easily meet lifetime savings needs. The TFSA could be best described as a Tax Free Investment Account because you can invest in stocks, term deposits, and mutual funds as well as applicable savings accounts.

The TFSA was started in 2009 allowing an investment of up to $5,000 per Canadian who is 18 years old or older.  The $5,000 amount is cumulative, meaning that if you haven't invested in a TFSA before, as of 2011 you could invest up to $15,000 ($5,000 for each investible year).  In January, 2012 you will be able to invest up to $20,000.

How the Tax-Free Savings Account Work: