1. Claim Medical Expenses
Most people forget that they can claim their medical expenses, you can get a tax credit after filing a tax return for the medical expenses that you paid for. Medical expenses that qualify include prescription drugs, medical therapist, and some medical premiums paid to insurance companies. Always keep your receipts incase the CRA asks for proof.
Keep in mind that the full amount that you spent on medical expenses cannot be claimed. There is a threshold, or something called the minimum dollar amount that is calculated through 3% of your net income or $2268.
2. Invest Borrowed Money
When you borrow money to make investments, your stock portfolio size should increase. As long as you have good financial and investing advice, your buying power will increase and with that you stock portfolio size as well. By borrowing money and paying interest on the money to buy stock, and bonds, this interest paid is tax deductible which will help you save on your taxes.
3. Purchase A Home Tax-Free With Home Buyers Plan
If you are buying a home the first time then you can use part of your RRSP savings to buy a home and you do not have to pay tax on the RRSP withdrawn for the purpose of making a down payment. This is called the Home Buyers Plan. The maximum amount allotted to borrow to withdraw from a person’s RRSP is $25,000. Remember that however much you withdraw you must also repay into your RRSP over a 15 year period with equal annual payments, this is mandatory. For an example, if you take out the maximum of $25, 000 and use that as a down payment, then the minimum payment you will have to make each year is $1,667 for 15 years until that amount of $25,000 is paid back in full.
4. Use Employment Expenses On Your Personal Taxes
Employees claim employment related expenses for their own tax deductions on their personal tax returns. These expenses include vehicle expenses, supplies, home office expenses, and many more. To claim employment expenses, you must fill out a T2200 form from whoever employs you. The CRA does not need this form submitted to them bust in the case of an audit, you should have it on hand. Keep in mind that employment expenses are only deductible if the
expenses are required by your work or if your employer does not reimburse you.
5. Max Out Your RRSP
Every year you can contribute to your RRSP to the maximum amount allotted. To find the limit for your RRSP you may look at the year Notice of Assessment. RRSP Contributions are tax deductible and any income or gain from the RRSP are not taxable. This makes tax savings for your personal tax return and helps your retirement savings grow tax free. This is one of the best strategies to help save on taxes.
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Muhammad Nasrullah and Muhammad Nasrullah CPA Professional Corporation will not be held liable for any problems that arise from the usage of the information provided on this page.
Muhammad Nasrullah,CPA, CGA, LPA
Chartered Professional Accountant
Licensed Public Accountant
206A – 2365 Finch Ave. West North York, ON. M9M 2W8
Tel: (1) 416-748-0817 ext 101 Fax:(1) 416-748-6814
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