CATALYST: MANAGING YOUR TAXES
KNOWING ALL AVAILABLE OPPRTUNITIES AND REALIZING SAVINGS IS KEY IN ANY TAX SYSTEM.
YOU SHOULD KNOW TIPS, STRATEGIES AND SUGGESTIONS TO MAXIMIZE YOUR SAVINGS.
TAX-SAVING TIPS, STRATEGIES and IDEAS
During these challenging times, Tax may become pervasive and complicated. Canada’s tax system offers a range of opportunities for you to realize savings. Do we really know where to find those available opportunities? Some tips, suggestions and important updates are summarised below to help you to maximize your saving and avoid stress.
- Claim home office expenses in the COVID-19 era:In the December 15,2020 announcement CRA stated that employees who worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 would generally be considered eligible for a home office deduction if certain other criteria were also met.
- CRA calculator- claim your home office expenses: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/work-space-home-expenses/calculate-expenses.html
- Home office: Employees can claim up to $400 in home office expenses, without the need to track detailed expenses.
- Personal computer equipment: The CRA will accept that an employer-provided reimbursement of up to $500 of all or part of the cost of purchasing personal computer equipment will not result in a taxable benefit to the employee, provided the purchase enables the employee to properly and immediately perform their work duties, and the purchase is supported with receipts.
- Utilities expenses – Expenses — things like rent, electricity and stationery — incurred by employers are deductible business expenses. So since millions of employees have been required to work remotely from home during the pandemic, shouldn’t they also be allowed to deduct these expenses?
- Investors:As investor, think about the after-tax real rate of return of investment alternatives in relation to their associated risk. From interest and dividend income to capital gains and losses, charitable donations to RRSPs or investing in TFSA its always better to consult.
- TFSA: Income and capital gains earned in the TFSA are not taxable, even when withdrawn at any time and used for any purpose. TFSA annual contribution limit is composed of three components:
- The annual TFSA dollar limit of $6,000 ($6,000 for 2020 and 2019; $5,500 for 2016, 2017 and 2018; $10,000 for 2015; $5,500 in 2013 and 2014; $5,000 prior to 2013) –
- Any unused contribution room from a previous year –
- The total amount of withdrawals from your TFSA in the previous year
- RRSP: there is no tax on earnings within an RRSP and withdrawals are fully taxable as income. Some strategies which can be used in/for RRSP: you may want to hold riskier growth-oriented investments in your RRSP to maximize its value. Generally, a lengthy holding period is necessary for this strategy to offset the associated risks.
- you may consider holding your interest-bearing investments inside your RRSP.
- holds qualified investments only in RRSP. If your RRSP acquired a non-qualified investment prior to March 23, 2011, the value of the investment was included in your income.
- Employees :can take benefits such as company cars, to stock options and sales tax rebates, employees of Canadian companies can take advantage of some helpful tax-saving opportunities.
- Professionals and business owners: There are many valuable tax-planning opportunities available. Whether you’re considering the use of a personal vehicle or the deductibility of travel expenses, incorporation, use of a partnership or other issues that affect professionals and business owners, learn how you can keep more of your hard-earned money.
- Incorporating or selling your business: Its always a good idea to consult before incorporation a business to understand the advantages and disadvantages of incorporation vs un-incorporated business. Selling a business can also be a complex and emotional process. Get in touch with us about the tax and business considerations to help make the sale a success.
- Principal residences-capital gains: The principal residence exemption is an attractive feature of the Canadian tax system. Reach out to us to find out how you may be able to earn the tax free capital gain on the sale of a principal residence.
- Family taxation: There’s virtually no area of family life in Canada that’s not affected in some way by tax. GHi’s team is ready to assist on many tax credits and planning strategies you should be aware of that could help you and your family find significant savings.
- Long-term elder care – tax assistance: Populations across the industrialized world are aging more rapidly than ever. In recent years, the proportion of persons aged 65 years and older has grown in every G7 country. You may want to learn about tax credits available for individuals, tax relief for assisted care and medical expenditures. Please feel free to call or email us.
- Retirement: Whether you’re just starting your career or have years of service under your belt, tax planning should be at the center of your retirement strategy.
- Immigration and Emigration: Both situations carry tax consequences. Canadian immigrant are likely to be treated as a Canadian resident for the period they are resident in the country, and as a nonresident if one emigrate from Canada for the period one is a nonresident of Canada, but the concept of residency is elusive. so you need to be aware of the rules. If you’re thinking of moving to or from
- Canada, GHi is there to assist in tax planning. Nonresidents Taxation:If you’re not a Canadian resident but you receive Canadian-source income, it may be subject to Canadian income tax. Find out how GHi’s planning strategies can help you save on that tax.
- Estate planning: While we may not like to think about the inevitable, an effective estate plan can minimize tax on and after your death and provide benefits to your surviving family members over the long term.
HOW GHi can help
To get guidance on adopting the strategy which best suits your scenario. Email us firstname.lastname@example.org or call at 431 887 4148.