Income Tax Planning

Income Tax planning can play a crucial part in assessing your tax exposure and can provide a road map to avoiding or reducing your tax risks.

 

The importance of an assessment or tax planning of your situation should never be over looked nor understated. This is an essential first step if you want to reduce your taxes.

Not only  will it help you to understand how to avoid the tax traps, you will gain valuable insights as to how to increase your income tax efficiently and protect your hard earned money from the tax man.

You will  be able to  accurately predict or assess how much your tax bill will be before the end of each year, on an ongoing basis.

 

Ever stopped to think about how much taxes you are paying unnecessarily?

As a crucial part of the financial and tax planning process, tax analysis is concerned with

  • Identifying or establishing tax objectives

  • Identifying and evaluating risks associated with specific tax situations

  • Evaluating the tax costs and benefits of suitable alternatives that address these tax risks

  • Selecting appropriate strategies and implementing them and

  • Monitoring the outcomes as part of the overall process.

The Anatomy of Tax Planning
  1. Assets and liabilities assessment
  2. Income sources e.g. salaries, investment income, capital gains, business income, dividends etc.
  3. Expenditures, these are either discretionary and non discretionary
  4. Tax deferral vehicles and tax efficient investments
  5. Levels of tax deductible debt
  6. Types of investments
  7. Risk management

In summary, tax planning provides a roadmap for a tax payer to reduce taxes while he/she earns, reduce taxes while he/she spends and guides him/her to strategies to protect, preserve and increase investment income in a tax efficient manner.

 

Ontario Income Tax


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