Tax Planning for the Individual
Good tax planning and tax efficient investing allows a taxpayer to take advantage of the many legal opportunities to reduce and minimize taxes. Tax reduction strategies should be an integral component of any wealth creation and preservation strategy.
Tax planning involves the careful and deliberate organization of one’s financial affairs in such a way as to minimize taxes and is a key component in all successful wealth creation strategies. This is perfectly legal and has been affirmed many times by the Supreme Court of Canada.
It’s generally been said that it’s not how much you make but how much you keep that leads to financial wealth.
Because the tax laws are always changing, so too must a taxpayer's tax saving strategies.A knowledgeable tax professional can be very helpful in explaining investment taxes, retirement plans, taxable income and can offer solutions to help you make sound investment planning decisions.
A good place to start can be the Notice of (Re)Assessment. This is a very valuable document with a wealth of important income tax information. Information about RRSP contribution limits and unused contribution room,Homebuyer's Plan or Life Learning Plan accounts can be found here. Also unused tuition credits,capital and non-capital lossesThis information can provide a good starting point in assessing your tax situation and helps to maintain continuity between tax filing years.
Many times, legitimate tax information is deliberately omitted because the taxpayer simply does not know that she can make a claim, or the receipts were misplaced or lost. Because of this,thousands of dollars in unclaimed, legitimate deductions are being lost each year.
The good news is that a tax payer can amend previously filed tax returns to include previously omitted information.
At Bailey's Tax Services, we can assist you in making these adjustments,while ensuring that you are in compliance with the law.
A Bit of Advice
There are times when some taxpayers might engage in strategies which, although legal and within the law, may be considered to be contrary to the spirit and intent of the law.
Known as tax avoidance strategies they are constantly being challenged by CRA, sometimes quite vigorously.The recent ruling, regarding income trusts, is an example of how quickly and suddenly tax situations can change.In recent years, tax shelters and charitable donation arrangements have also come under closer scrutiny.
When a taxpayer deliberately and willfully omits information or falsifies information so as not to pay his fair share of taxes he can be found guilty of tax evasion.
Tax evasion is a criminal offence for which the penalties can be substantial fines and/or imprisonment.
Simple errors in math and are usually corrected by CRA and the taxpayer is usually informed of any changes to his tax account.
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