FINANCE 5 TIPS TO SAVE ON YOUR TAXES cash to invest. Give your nest-egg a boost by borrowing, and get a tax break on the loan interest too. One important caveat, of course, is making sure the money is invested wisely, because you’ll have to repay the loan even if the value of the investment declines. Save on taxes now with an RRSP contribution, save on taxes later with a TFSA contribution When you contribute to a tax-free savings account (TFSA), the income your Tax-filing season is here again – the Canada investments earn is sheltered from taxes. Revenue Agency started accepting 2021 income You can withdraw any amount at any time, tax returns on February 21, and most Canadians and there’ll never be a penny in tax owing. have to file their return and pay any balance owing by April 30. Conversely, when you contribute to a registered retirement savings plan Financially savvy Canadians are always looking for (RRSP), your taxable income for the year ways to reduce their tax bill. Whether it’s with tax is reduced by an amount equal to the credits and deductions, or effective financial tips value of your contribution, lessening your and strategies, there are many things individuals immediate tax burden and, in some cases, can do to manage their tax burden. allowing taxpayers to reduce their income enough to qualify for a lower marginal tax Here’s a look at five ways you might be able to rate. follow to bring down your tax bill this filing season. However, it’s important to remember that Claim home office expenses, even if you’re a RRSP contributions and the income they salaried employee generate are taxed when the money is Self-employed Canadians who work from home withdrawn in retirement. Still, for most offices have long been able to deduct a portion people, the tax rate they pay in retirement of their expenses for utilities, services, and other is less than it was in their higher-earning costs. Since the COVID-19 pandemic forced working years. millions more Canadians to work from their homes, the CRA has broadened the eligibility for home Make a charitable donation office deductions. Anyone who worked at home Federal, provincial, and territorial more than 50 per cent of the time for at least four governments all offer tax credits on money consecutive weeks in 2021 can claim $2 for each donated to charitable organizations, but day worked at home in the year, up to a maximum giving cash isn’t the only way to generate of $500. a tax break through gifts and donations. It’s also possible to gift publicly-traded Claim any applicable benefits, including the securities and their accrued capital gains Canada Workers Benefit to a registered charity or foundation. This year, the income threshold to qualify for the Doing so not only entitles the giver to a Canada Workers Benefit has increased by nearly a tax receipt for market value of the security, third, to just over $32,000. Additionally, the federal but also removes the obligation to pay tax government has also increased the qualifying on the capital gain. threshold for combined household income and added a new ‘secondary earner exemption.’ As a This article is not intended to provide result, many more low-income taxpayers will be financial or financial planning advice, please eligible for support through this benefit, which call or email Moya Financial and they will be provides up to $1,395 for individuals and $2,403 more than happy to chat with you! for families. Borrow to invest Unlike car loans or credit card debt, interest on money borrowed for the purpose of investing is tax deductible, making it easier to grow your longterm wealth even if you don’t have a ton of extra
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