Reduce Your Personal Taxes
your income tax return can be stressful and time consuming, but there
are tactics that can help reduce the amount of tax you pay:
investments that generate interest income in a registered account to
defer taxing the income and hold dividend paying investments that are
taxed at a lower rate outside your RRSP or RRIF.
- Will you realize a capital gain? - Carry forward losses realized in previous years to reduce taxable gains.
- Are you and your spouse splitting investment income? - Consider a loan for investment purposes.
you and your spouse make charitable donations? - Claim all donations on
one tax return regardless of the donor. You receive a tax credit equal
to 16% on the first $200 donated and 29% on any additional donations.
you planning to sell investments during the year? Will you also be
making a charitable donation? - Donate the investments directly to
charity and halve your tax.
you and your spouse collecting CPP/QPP? - Sharing benefits may reduce
the total tax on this income and may also prevent the higher income
earner from losing any OAS entitlement.
- Are you collecting
an employer pension? - A $1,000 tax credit is available to individuals
in receipt of employer pensions and also to those aged 65 or older who
receive RRIF payments.
- Exercising employee stock options? - Speak to your employer about deferring the employment benefit.
- Will you have an employer provided car? - Keep track of personal and business use to reduce the income inclusion.
- Receiving a bonus? - Defer it for a year if you will be in a lower tax bracket.
- Do you have unused RRSP contribution room? - Make this year's contribution now and start enjoying tax-deferred earnings.
comments contained herein are not intended to be a definitive analysis
of tax or estate law, and are general in nature. Professional advice
regarding an individual's particular tax position should be obtained