Maximize your Deductions: Top Tax Tips for Canadian Taxpayers Part 2

This year, with the record levels of inflation we have experienced and the continued rising costs of living, there are ways to avoid overpaying on your taxes.

Organizing your finances and preparing for your taxes in advance will give you ample opportunity to look for tax deductions, tax credits, and other rebates or benefits that will help you lower your tax bill and keep more money in your pocket.

1. Retiring (or even moving) abroad make sure you plan for these tax changes 

• Remember that there are tax implications if you live somewhere other than Canada. You could have obligations in that other country as well as still having obligations here in Canada.

1. Once you’ve hit 65, you can elect to stop contributing to CPP

• You can opt out of the Canada Pension Plan (CPP) once you reach the age of 65, there are forms that need to be filed to make this election, speak with your tax accountant for guidance.

1. Only spousal support payments can be claimed as a tax deduction, Child support can't be claimed

• Child support payments cannot be deducted by the paying parents, however the paying parent may still be eligible to claim the eligible dependent tax credit. There are very specific parameters that need to be met to be able to make this claim, I definitely recommend having your tax accountant review your agreement to see if you would qualify.

1. Get your foreign investments information ready

• There are tax implications when investing in U.S. assets, whether it's stocks, real estate, or other assets. It is very important to disclose ALL foreign assets and investments to your tax accountant, so they can help you determine if you are subject to foreign reporting requirements

1. It's nice to get a refund in April every year right? but wouldn't the money be better off in your pocket throughout the year - If you are consistently getting a tax refund you can adjust the amount of taxes that come off your paycheque so that you have a little extra each payday 

• While refunds are nice, wouldn't you rather hold on to the money, you could be saving it in your TFSA for the short term in case of an emergency, or use it to pay down a credit card balance sooner? 

Until next time,

Christine Walters