Tax minimization strategies

Tax minimization is more than just simply maximizing the amount of money you keep in your pocket at income tax time; its a long-term engagement and an important component of the overall financial planning process. In addition to preparing personal income tax returns for our clients, we incorporate effective tax minimization strategies into the overall planning process whenever possible.

It can include:

  • Choosing tax-efficient investments, both in the accumulation stage and as you begin to draw income from your assets
  • Taking advantage of capital losses
  • Income splitting though Spousal RSPs and pension income splitting
  • Utilizing asset location as well as asset allocation to lower overall taxes paid on investment gains
  • Exploring the advantages of incorporation
  • Estate planning issues such as an estate freeze and/or setting up a family trust
  • Transitioning a family cottage
  • Determining whether an up-front tax deduction or the long-term benefits of Tax-Free Savings Accounts makes the most sense in your situation
  • Maximizing charitable giving strategies

At a minimum an advisor should be aware of the consequences of taxation on investment and financial planning decisions. Ideally they would incorporate tax minimization strategies into the financial planning process on an on-going basis: doing so requires a high level of understanding of tax issues as well as bringing in qualified professionals occasionally as required.

Resources:

  • Reducing Tax at Source: Booklet
    Follow these three easy steps to reduce your payroll taxes and you'll have more money each month for your investments.
  • Capital Loss Planning
    Use this Info Page to understand capital loss planning, including the superficial loss rule and general tax strategies like carrying back a loss, transfers to an RRSP and spousal/common-law partner transfers.
  • Planning for a family cottage
    Succession planning for a family cottage - tax-efficient strategies for passing on a family cottage to the next generation.
  • Pension income splitting
    Learn more about this new planning opportunity, which could see you pay significantly less tax on your pension savings withdrawals.