Tax Strategies Often Missed by Tax Factories

12 December, 2012

The Top Income Tax Strategies that are Missed by “Tax Factories”

This time of year many “tax factories” spring up. Whether it is a new piece of software or a person who has had 3 weeks of tax training; you could be leaving money to the tax man that is rightfully yours. You could be missing a number of income tax strategies. You need a Certified Management Accountant who works with tax everyday, not just for two months a year.  For a small amount you can get the professional adviceyou need to keep the tax man away from your money.

Personal Tax

  • Maximizing the value of Dividend Tax Credits and where appropriate transferring them between spouses
  • Protecting the principal residence deduction, if had to leave the house to work elsewhere for a period and renting the home for that time period, then returning to the home and getting the right to call it a principal residence again.
  • Protecting taxpayers from claiming unscrupulous tax shelters and schemes that will cause the taxpayer huge amounts of grief later (i.e., aggressive donation schemes, private school tuition deduction schemes)
  • Punitive sections of the Income Tax Act related to money going between family members (called Income Attribution
  • Not being aware of carry forwards that a client may be able to take advantage of
  • Maximizing the principal residence capital gain exemption if part of it is being rented out
  • Capital gains and superficial losses.
  • Not digging deeper with the client to find out other tax issues a client is facing, or could potentially be taking advantage of.

Change Jobs in 2011?

  • Dealing with a lump sum severance to get a rollover into an RSP without a) going into income or b) impacting/using any of your normal RSP contribution room.

Own a business?

  • Income splitting opportunities, especially when there is a business.

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