4 Tips to Help You Pay Less Taxes
Article revised on 1 April 2019
According to the specialty channel Argent, 40% of Canadians don’t know whether they take full advantage of all the tax benefits they are entitled to. At the start of the tax season, take the time to properly plan ahead so you come out on top!
Here are 4 tips that will help you recover what’s yours and let you save more, too.
1- Investing in a TFSA
One of the best methods to make your money work for you is by placing it in a Tax-Free Savings Account (TFSA). Money invested in a TFSA will generate income tax-free and you still benefit from other advantages.
2- Contributing to your RRSPs
Every penny you deposit into your Registered Retirement Savings Plan (RRSP) is deductible from your taxable income. 82% of Canadians don’t know how much contributing to their RRSPs can save them in taxes (Léger Marketing). Canadians have more to gain by learning their RRSP basics.
3- Break up your income
Spreading out a couple’s income between the spouses will allow them to save on taxes. By transferring part of one spouse’s income to the other, the one earning more will reduce his or own own taxable income and tax rate.
4- Taking advantage of tax credits
Medical expenses, charitable donations, children’s activities, and childcare expenses are just a few of the many sources of tax credits, yet most Canadians are not aware of them. To take advantage of them, take a look at the list of provincial and federal tax credits.
Who fills out your tax returns?
Letting a professional handle your taxes will likely net you more money in your pocket. Are you a self-learner? Using a specialized software can be just as profitable.
And always remember that the best way to reduce your taxes is by filing your tax returns before the deadline!
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