tax planning

Year End Tax Tips

With a few weeks to go before the year-end, you may wish to think about some moves you can take now to save you some taxes for 2016.

Along with the usual advice to do any tax loss selling before December 23rd on any equity investments to offset any capital gains earned in other investments during 2016, there are a few new tax planning strategies that you can take advantage of.

The Big Squeeze!

“Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.” - Frederic Bastiat

By the time that you read this article, it is very likely that the Federal elections will soon be over. When all the back slapping, hand wringing and hyper-analysis is done, the new political regime will be faced with one inescapable challenge.

Life Insurance Tax Rules Changing

Starting in January 2017, the allowable cash value build up under tax rules in life insurance policies will change. The federal government introduced changes in December 2014 that are designed to modernize life insurance exempt testing rules as they have discovered that people are living longer and that their insurance policies will pay out later.

As a result of this new legislation, the affected demographics are middle-class consumers, business owners and wealthier Canadians looking to pre-fund their estate tax bills using cheaper life insurance dollars at death.

Year-End Tax Planning Ideas

The following are some ideas for individuals and business owners to reduce income taxes as 2014 draws to a close.

Individuals should consider doing their RRSP contributions before the RRSP rush in the first 60 days of 2015. You can get better values by buying today than when all the last minute procrastinators rush to buy their RRSPs in the New Year and temporarily push up market values.

How to Benefit from Being Charitable

Charities play a vital role in our society. The Canadian government recognizes this role and tax breaks exist to encourage taxpayers to give to their favorite charities.

Roger makes occasional donations to various charities. His donations are rather small and amount to only a few hundred dollars per year. He learned that he might get a bigger tax break if he was a little more generous with his donations.

Planning Ahead Eases Worries when Facing a Tax Audit

A letter arrives from Canada Revenue Agency (CRA). You are being audited. Panic ensues as you wonder what you did wrong and why the CRA is targeting you. 'There must be bigger fish to fry,' you might say to yourself.

The first thing you need to do is relax and take a few deep breaths. If you have a qualified tax advisor on your team, you have nothing to worry about. If you don't, now is a good time to contact a professional tax planner to review your returns and assist you with the audit.

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