3) Set up a Tax Free Savings Account (TFSA). As long as you stay within the contribution limits, income earned in a tax-free savings account (TFSA) accumulates tax-free.
4) Income split with spouse or dependents. One spouse can contribute to a spousal RRSP for the other spouse. Married seniors can split their eligible pension income. Business owners may be able to pay their children and other family members an income for work done for the company.
5) Retain professional accounting services
6) Make charitable contributions and gifts. Charitable giving has many significant benefits in tax planning. All donations made during the year earn you Federal and Provincial tax credits.
7) Maximize business & investment expenses and claims. You can deduct fees paid for advice (e.g. Financial Planner’s Fees, Lawyers Fees, and Accountant Fees)
8) Maximize your deductions and tax-credits
9) Maximize non registered investments with more capital gains and dividends than interest income. Interest is earned on investments like guaranteed investment certificates (GIC) or term deposits. 100% of your interest income is subject to tax. Tax on interest income is the highest of the three types of return. Dividends are earned from the ownership of common and preferred shares. Capital gain is the amount that the value of your investment has increased since it was purchased. Only 50% of your capital gain is subject to tax.
10) At a certain income level...Incorporate your business. At certain income levels, corporate tax rates are lower than personal tax rates.
Insights
10 WAYS TO REDUCE YOUR TAX BILL
1) Get a Professional Financial Plan done
2) Maximize your RRSP contributions. Any income that is earned in a registered retirement savings plan (RRSP) is usually exempt from tax as long as the funds remain in the plan and any underlying investments are qualified.