Paying too much in tax?  As a Tax Consultant in Mississauga, I can reduce the amount of taxes that you pay.  I accomplish this by utilizing tax savings strategies designed for individuals, business owners and investors just like you.

As a Tax Consultant Mississauga, I highly recommend that you pay close attention to these personal tax savings strategies:

How to Save Personal Taxes – by Tax Consultant Mississauga, Canada

 

1.  Contribute to RRSP’s, says Tax Consultant Mississauga

As a Tax Consultant in Mississauga, I recommend that you contribute to your RRSP’s on an annual basis to save for retirement and to also decrease your taxes.

Contributions made to a RRSP are tax deductible and any investment income or capital gains realized inside a RRSP are not subject to tax.

The maximum amount that you can contribute to a RRSP is equal to 18% of your previous year’s earned income, plus any unused RRSP room carried-forward.

For additional reading on RRSP’s vs. Tax Free Savings Accounts, please see TFSA vs RRSP – Chartered Accountant Toronto Discusses Pros and Cons

2.  Turn your interest payments into tax deductions

Interest paid on money borrowed for investment purposes can be deducted on your personal tax return.  You can even deduct interest paid on money borrowed against your house to purchase investments.

 “Keep your bank statements as proof of interest paid, because interest can be tax deductible”, says Tax Consultant Mississauga

Note that investments must be income producing, such as real estate, mutual funds, bonds, or stocks, for interest to be tax deductible.  Interest paid on money borrowed to purchase non-income producing investments, such as vacant land, is non deductible.

3.  Donating to charity offers tax benefits

Federal and Provincial tax credits are given to individuals who donate to charities.  The charity must be recognized by the Canada Revenue Agency and the receipt should clearly show the registration number of the charity.

 “Donating to charity is a good cause.  But it also offers great tax credits, says Tax Consultant Mississauga”

In the province of Ontario, Canada, the donation tax credit is 21% for the first $200 and 46% for amounts donated over $200.

For example, if you made a charitable donation of $1,000, then your donation tax credit would be $410 (i.e. 21% x $200 + 46% x $800).

4.  Car expenses tax deductible – Tax Consultant Mississauga

If you are required to use your car for your job, then you can deduct the operating costs related to your car on your personal tax return.  Vehicle operating costs include:

1. Fuel & oil
2. Maintenance and repairs
3. Parking
4. Toll charges (e.g. 407 toll)

In addition, if you own your car, then you can deduct capital cost allowance (i.e. tax depreciation) at a rate of 30% of the car’s cost (i.e. purchase price) each year, on a declining balance scale.  Alternatively, if you lease a car, then you can deduct the lease payments to a maximum of $800 per month.

                There are two main conditions you must satisfy for car expenses to be tax deductible:

1. Form T2200, Declaration of Conditions of Employment, must be completed and signed by your employer.
2. A condition in your employment agreement must stipulate that you are required to use your car to carry out your employment duties.  (Driving to and from your office does not qualify as an employment duty).

Before deducting car expenses on your personal tax return, please speak to a Tax Consultant in Mississauga.

5.  Union, Association & Professional dues – easy tax deduction

Fees paid to unions or associations are tax deductible on your personal tax return.  In addition, professional dues (e.g. fees paid to your professional organization – accounting, engineering, law, etc.) can be deducted on your personal tax return.

Don’t forget to provide your Tax Consultant in Mississauga with receipts for union and professional dues paid, as he/she will require this to prepare your personal tax return correctly.

For additional personal tax savings strategies provided by Allan Madan, Tax Consultant Mississauga, please see Personal Tax Return Tips

About the Author – Tax Consultant Mississauga Contact Now

Allan Madan is a Tax Consultant in Mississauga, Ontario, Canada.  He enjoys working with individuals, businesses and investors. 

While Allan’s expertise is in the area of taxation, his accounting firm, Madan Chartered Accountant offers many services, including financial statements, personal tax return preparation, corporate tax return preparation, and financial and tax advice.

Related Articles

1.  For information on saving business taxes, please see Mississauga Accountants – How to save business taxes in Canada

2.  Accountant Toronto – 5 Secrets to Saving Taxes for Canadians

Tags: tax tips

This entry was posted on Monday, September 6th, 2010 at 10:00 am by superAmin and is filed under Tax Tips 2010. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.