La Cible

Mai 2017

La Cible, magazine officiel de l’IQPF, est destinée aux planificateurs financiers et leur permet d’obtenir des unités de formation continue (UFC). Chaque numéro aborde une étude de cas touchant les différents domaines de la planification financière.

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23 FEATURE ARTICLE Perverse EMTR effect for some people While it is true that a reduction in net income is beneficial for many taxpayers, an increase can have the opposite effect. Imagine the same couple, who just received a $1,000 raise each. Great news, right? But look at the result of the boss's generosity: not only are the Canada Child Tax Benefit, the Child Assistance Payment, the GST credit, the work premium and the solidarity tax credit reduced, but many withholding taxes, such as contributions to the Québec Pension Plan (QPP), employment insurance and the Québec Parental Insurance Plan (QPIP), increase. The simulations carried out by the CQFF team show that for some taxpayers, the EMTR can be up to 80%! That means that a $1,000 raise could represent only $200 in the taxpayer's pocket! The table below, which is taken from the CQFF website, clearly illustrates how important it is to take the EMTR into consideration. 4 The added value of a financial planner The financial planner's role is to help people develop a plan that will lead to good financial decisions that help them achieve their goals. Assessing and choosing objectives and priorities are crucial aspects, but I have always believed that our primary responsibility is to improve our clients' financial knowledge. Understanding the EMTR – or rather, the impact of tax measures on RRSP contributions – is one striking example of what financial planners can do by using more than one financial planning area to help their clients improve their understanding of personal finances. 4 Tables showing 37 different situations can be found online at .

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