Solid Tax Planning Education

8 Ways to Boost Your Tax Return

1. Know Your Sources of Income
Why: most people have four main sources of income:

  1. Interest – taxed at your full tax rate
  2. Capital Gains – 50% of gains are taxable
  3. Dividend from eligible Canadian Company: qualifies you for dividend tax credit that reduces the tax you pay
  4. Return of Capital – your money being returned tax free, but a receipt reduces the Adjusted Cost Base of the original security

2. Allocate Your Investment Holding in the Right Places
Why: to defer the hefty tax on the interest they produce

3. Choose Tax-Effective Investments
Why: easiest way to increase your take-home pay

4. Stop Trading Every Day
Why: the more you trade, the more often you pay tax

5. Use Your Losses
Why: effective way to save on capital gains tax

6. Pay Off Debt
Why: some debt may not be deductible

7. Donate To Charity
Why: you can claim 75% of your net income, and you can carry forward any unclaimed donations

8. Use Your Family
Why: income splitting leaves more money in the family pot

Good luck with your income tax filings!

by contract02 on August 1, 2013 in

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