Here are a few tax tips to help you:

  1. Reduce the taxes you pay
  2. More efficiently manage your family income
  3. Use certain expenses to your best advantage

These are just brief explanations – if you want more information on any of these points please e-mail or call me.

Review your portfolio for tax efficiency

  • Have interest earning investments within your RRSP
  • Investments that generate capital gains are better to be in non-registered investments

Donate securities directly to a charity

  • As opposed to selling securities and donating cash, special government incentive may cut taxes owing by half

Contribute to your RRSP

  • Deadline is 60 days after the end of the year
  • Contribute early, money will have more time to grow while sheltered from taxes

Contribute to a spousal RRSP

  • Higher-income spouse makes the spousal RRSP contribution and receives the deduction

Defer your bonus

  • Delay payment of the year’s bonus until January this will defer tax until the following year

Family budgeting

  • Have the higher income earner pay for family expenses that are deductible, have the lower income earner invest their income

Child care expenses

  • Qualifying child care expenses can be claimed on your tax return
  • You can claim amounts paid to children 18 years or older who are looking after siblings 16 years or younger, when the child care allows you to earn income, this will make you eligible for a deduction (claimed on lowest spouse’s income)

Salaries to family members

  • If you have a business, pay family members for any services provided (remember – must be reasonable to what you would pay someone else to do the same work)
  • This will also generate RRSP contribution room for them

Make non-deductible debt – deductible

  • If you are paying non-deductible interest and have non-registered investments,  an option is to sell non-registered investments and use the proceeds to pay down non-deductible debt
  • Take out investment loan and re-purchase investments (deduct interest payments)

Shari Molchan

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