Tax Time - Let’s Maximize!

It’s over! At least for most, personal income taxes are a done deal as the deadline for those that owe was April 30th. For the self-employed the deadline is not until June 15th but for most, it’s done.  Since I am involved in all aspects of our nail-biting Canadian income tax season, I help clients assemble what slips they need, answer questions, advise on options and I’m generally very involved with many different aspects this unique annual exercise.

Yes, I have my own taxes to deal with too and I fully appreciate the experience.

This year as I pondered on ideas how I can further help I thought I’d share some ideas on how to make next year better for anyone willing to listen:

Here are a few ideas for setting up for a better year next year:

• For those with tax refunds, invest them, RRSP’s RESP’s or TFSA’s are all options that can improve your chances of paying less or getting more next year.

• For those with refunds and high-interest debt like credit cards, paying them down is another option but then applying your lower payment savings to investments is a financial home run.

• If you have had taxes owingl, increase your RRSP deposits, it’s the simplest way to ensure you will pay less taxes next year.

• For those working at home double-check with your employer whether they will supply a T2200 to allow home workspace deductions.

• If your RRSP limits are maxed out save more in your TFSA. Faster wealth creation = more financial freedom.

• For those with regular yearly investment income from non-RRIF/Pension sources, is your income tax efficient? Are you paying more taxes because the “type” of income you’re getting isn’t the most efficient? Yes, the tax efficiency of income is a “thing”. It’s a bigger topic than can be handled here but if you need an “income check-up”, yes we can help!

• Ok lastly, for you cash hoarders… yes I know you’re out there! By sheer procrastination, lack of information, or maybe it’s a safety perception thing many people have excess amounts sitting in chequing accounts earning near 0%. For those the message is clear, get your money working! The difference can be thousands per year in lost opportunities. Excess idle cash is a wealth drag and once again… we can help.

Yes, I will always advocate applying more to investing and since for most, the single largest roadblock to wealth creation is taxes then paying less tax just makes the best sense… always!

Since taxes are fresh in our minds, here’s to improving everyone’s tax score for next year!