Income Tax Returns

Top Income Tax Saving Tips for 2017 and Beyond

As the due date for filing income tax return nears, taxpayers become more conscious of our borrowings, debts and expenses. You suddenly realize that you could've done without a certain taxable item and shouldn't have bought that in the first place. People get more and more anxious as the tax filing date approaches. They don't see it as an opportunity to introspect and know about how they can save on their taxes. It's not so difficult. A little awareness and thoughtfulness is all it takes.

Contribute to RRSP

You must've heard this a lot as an effective way of tax saving. But it's also a great way to save for future. The amount you invest now in RRSP non-taxable account on a weekly basis will grow far more than the amount invested in a taxable savings account.

Restrict loans to investment only

Let's suppose you took loan for buying a car. Now such assets depreciate with time. There is however a difference between their real value and market value. Market value, on which the depreciation is calculated is always greater than the real value. So you end up paying more that what it's worth. But if you purchase loan to further invest in your business, you're liable for many tax deductions and you'll earn from your loan.

Sell off your loss making assets

Even if you have to sell for a lesser value. The best way of tax saving is putting everything in place and getting rid of the clutter. Selling your investments or stocks that are going in for a loss will have you even out your capital gains on your other stocks and you'll be able to save on your taxes on capital gains.

Save with your spouse

You can contribute to savings account or RRSP account of your spouse. It helps to reduce your tax bill. It works best if your income surpasses the earnings of your spouse by a big margin. You can also invest in the name of your spouse. That'll save you a lot of money. Seek professional help on how to go about it.

Keep contributing to TFSA

Unlike RRSP, you can make contributions to TFSAs for as long as you want. Tax-free saving accounts don't come with a mandatory annual withdrawals. Each year, a senior taxpayer can deposit up to $5,500 in his/her TFSA. that way you can even out the tax paid on RRIFs if you invest your RRIF withdrawals in TFSAs. TFSA withdrawals are non-taxable.

Start your own business and keep receipts

A great way to save on taxes is by starting your own business. That'll make your expenses claimable which were earlier taxable. for example, if you are using your car for business purpose, you can claim a part of an aggregate of expenses like gas and servicing etc. It's important to save the receipts in order to differentiate between personal and business expenses. CRA offers many tax benefits for small business owners and you can have your tax deduced by a great margin.

For more expert tips on Corporation Income Tax Returns and personal income tax saving, consult ZRPC, the professional tax consultants in Scarborough.