5 ways to relieve your tax aches next year

Tax season is over… which means tax planning season has just begun. There are certainly tricks to easing those formidable tax aches – the most effective and important of which is to start planning for next year… RIGHT NOW.

We know what you’re thinking: Why didn’t I know about this last year?!

Well, it’s never too late! To help you get closer to tax ease, here are some tips to keep at the forefront of your mind this tax planning season. Let’s take a look…

Tax tips to keep in mind (and keep you at ease)

  1. Contribute to an RRSP to reduce and defer taxes. If you happen to contribute to a spousal RRSP, position yourself to split income in the future. Contributing to an RRSP early leads to higher returns in the long-term. Learn more from the Canada Revenue Agency (CRA) here.
  2. Contribute the maximum allowable amount to a TFSA. Your TFSA deposits and returns grow tax-free. You can transfer funds to a spouse so they can contribute to their own TFSA as well. As a couple, you can double your tax savings and, within a few years, build up a considerable tax-free nest egg (second honeymoon, anyone?). Learn more from the CRA here.
  3. Invest non-registered savings into “corporate class” funds. You can receive tax-efficient capital gains or Canadian dividends. Further, you can defer taxes on inter-fund transfers until you sell your assets.
  4. Did you buy your first home? Benefit from a federal non-refundable tax credit if you’re a first-time home buyer in 2014, and you’ve been a non-owner tenant since 2010 (those who took advantage last year enjoyed a $750 credit). Learn more from the CRA here.
  5. Stay single even if you’re in a relationship. If you get into a relationship in 2014 and both of you have a child, you can file as single this year and each claim the full amount for one eligible dependant on your federal tax return (in 2013 this amount was $11,038 per taxpayer). Learn more from the CRA here.

Need some help?

For more information about any of these tips, talk to a tax expert.