Why Tax Planning? Key Tax Planning Strategies

Share →
Profile Image KYFA Trusted™ Advisor
article contributed by

Anna Knight, CFP®

Certified Financial Planner at International Capital Management Inc.

Extensive experience in Tax Planning, Retirement Planning and Fixed Income.

Depending on your circumstances, proper tax planning can allow you to increase your current cash flow or increase the amount of money that you are putting away towards your retirement or both. Here are just a couple of strategies that I implement with my clients on ongoing basis. Over the years, these strategies have saved my clients thousands of dollars each year, they can do the same for you.

Maximizing RRSP contributions: Every dollar of RRSP contributions generates between 21-46% return immediately through income tax saving.

Utilizing Spousal RRSP: Ensures that at retirement you have equal amount of assets under each spouse. This minimizes income tax payable at retirement.

Structuring Non RRSP investments tax efficiently. By structuring Non RRSP investments to generate mainly capital gains or dividend income, significant increase in after tax return is capitalized.

Making a mortgage tax deductible. By converting your mortgage into a tax deductible cost, a substantial tax deduction is created, while wealth continues to be accumulated.

Setting up a RRSP Meltdown to lower taxes at retirement: RSP withdrawals at retirement are taxed as income. Drawing down RRSP to pay for an investment loan during working years, slowly converts RRSP investments into Non RRSP assets, thus substantially lowering your taxes at retirement.

Lowering amount of income tax payable by utilizing flow through shares: Flow through shares provide up to a 124% tax deduction above and beyond your RRSP room and can save a substantial amount in income tax payable today.

Remember, by utilizing all of the applicable tax saving strategies you too can keep more of your hard earned dollars in your pocket. All it takes is planning and action. To learn more about these strategies and if and how they apply to your current situation, feel free to contact me at 416-621-6299 ext. 252, or visit my profile HERE.

Author: Anna Knight, CFP®