1. Donation Tax Credit

You can accumulate donations and claim them in the same year to receive a higher tax credit. Also, you can combine donations with your spouse’s on a single tax return.

2. Accounting Fees

The accounting fees paid may be deducted from investment income, rental income, or business income reported on your tax return. In all other cases, accounting fees are non-deductible.

3. Salesperson’s Expenses

Expenses are deductible under the condition that they were incurred for the purpose of earning a commission income.

4. Vehicle Expenses

If you are required to use your personal vehicle for work, certain expenses can be deducted. Only the business use of your vehicle can be deducted on your income tax return.

5. RRSP

Contributions made to an RRSP are deductible from your income. The maximum amount that can be contributed in 2019 is $26,500. Any income earned inside an RRSP is tax-free.

If you have just finished school, and are just starting out your professional life, you might be wondering what tax strategies and credits you should take advantage of. There are some basic things you should consider:

1. Tuition Tax Credit

There is a tuition credit for the amount of tuition paid. When you’re a student, you usually don’t have enough income to use the full credit. Any unused tuition credits are carried forward and can still be claimed in future years.

2. Student Loan Interest Credit

Maybe you haven’t paid your tuition; perhaps you have student loans instead. There are also tax credits you can take advantage of from your student loans. The interest owed on student loans is eligible for credit and can lower the amount of your income tax.

3. Employment Expenses

Sometimes, you have certain employment expenses that are necessary in order for you to perform your job duties, such as supplies, uniforms, car expenses or home office costs, these are tax deductible.

Are you a young professional that’s just starting to handle your own finances? Here are some essential tips you should consider with regards to your first big investments.

How Do You Plan on Saving Your Pay Cheques for Retirement?

When you have a steady flow of income, make sure to put a portion of it away for when you retire. The first financial investment you make, once you start earning should be a registered retirement savings plan. You might think “I could just be putting my money in a savings account, why do I need an RRSP?” An RRSP would be beneficial because the amount you contribute is tax-deductible, at 18% of your prior year’s earnings or a maximum of $26,500 (2019), whichever is lower.

Your First Big Purchase as a Young Professional

For most people, it’s either buying a car or a home. The first thing most young professionals think to buy when making more money is a new car. But what if, you could buy your first home sooner if you postponed buying a car? Instead of buying a car, put your money towards your first home or mutual funds. A car is not an investment.

If you have a job and are concerned about paying too much in taxes then this article and video is for you. There are two common taxable benefits that are provided by employers to employees.

Benefit 1: Company Car

One of the most common taxable benefits for employees derives from a vehicle that the company either owns or leases. This is known as the standby charge, an imputed benefit to you, the employee merely because you have access to a company vehicle. The amount of the standby charge should be reported on your T1 tax return, T4 slip, and you will have to pay tax on this amount.

Want to Reduce the Standby Charge?

There are two methods to reduce this charge. The first way is to ask your employer to provide you with a less expensive vehicle. The second option is to reduce the number of personal kilometers that you drive the company car.

Did you receive stock options from your Canadian employer? If yes, then it’s highly recommended that you go over the points in this article and video.

What is a stock option?

An employee stock option is an arrangement where the employer gives an employee the right to buy shares in the company in which they work usually at a discounted price specified by the employer.

CCPCs (Canadian Controlled Private Corporations) – Employee Stock Options

A CCPC is a company that’s incorporated in Canada, whose shares are owned by Canadian residents. By definition, a CCPC is a ‘private company’ and is therefore not listed on a public stock exchange like the New York Stock Exchange or the Toronto Stock Exchange.

When your employer grants or gives a stock option to you, you do not have to include anything in your taxable income at that time. In other words, there is no tax consequence to you at the grant date.

Are you in the luxurious period of retirement? Have you started planning for it? If not, I have helpful tax tips for people who are retired or planning on retiring.

Using the Pension Income Tax Credit

When it comes to tax planning for retirees, this tip is ideal for anyone over 55 years of age. If you fall in this bracket, you can receive a tax credit of up to $2,000, or your pension income amount, if it is lower. This can save you $400 or more, per year, in taxes. Pension income includes the following:

• Annuity income out of an RRSP or a deferred profit sharing plan
• Income from a registered retirement income fund
• Income from foreign pensions

If you are 65 years or older, this tax credit can be claimed at the end of the tax year and if your income is less than $78,000.

Split Your Retirement Pension

You and your spouse can apply to receive equal shares of your Canadian pension plan income that was earned. Essentially, this is beneficial if one spouse is in a higher tax bracket than the other. As a result, you will

Divorce and separation can be an extremely emotional and difficult time in your life. To make matters worse, these life changes can lead to unwanted financial stress. Nevertheless, there are various tax saving opportunities that can help save you money throughout your marital transition.

1. Split Your Family Assets

You should consider the after-tax cost of family assets when splitting them up upon separation or divorce.

2. Do Not Cash in RRSPs

Do not cash in your RRSPs when splitting your family assets. There is a special rule in the Income Tax Act that allows one spouse to transfer their RRSP to the other spouse upon separation or divorce. This is very helpful if you have to make an equalization payment to your spouse.

3. Update the CRA with Your New Marital Status

If you have children, it is important to update the CRA on your new marital status after you have been separated or divorced. The Canada Child Benefits that you receive for your children is based on family income; this includes the combined income of you and your spouse.

Have you ever wondered whether it’s better to invest in a TFSA or an RRSP? As a Chartered Accountant in Toronto, I’m here to help you evaluate the pros and cons of each, so you can make a more informed decision.

TFSA

The Tax-Free Savings Account (TFSA) was introduced by the Canadian government on January 2, 2009.

The tax attributes of a TFSA are as follows:

• Any income or gains earned inside the TFSA are not taxable
• Withdrawals from a TFSA are not taxable to you
• If you withdraw an amount from a TFSA, you can contribute that amount again to the TFSA
• You can contribute up to $6,000 to a TFSA per year and any unused contribution room carries forward to the next year
• You do not receive a tax deduction for amounts contributed to a TFSA

Canadians are very familiar with Registered Retirement Savings Plans (RRSP), as they have existed for a number of years now.

When personal tax filing season is just around the corner, it is essential that you avoid these five pitfalls when you are preparing your personal taxes.

1. Do not forget to claim a tax credit for your medical expenses. This is one of the most missed tax credits every single year. So don’t forget to gather your medical receipts for prescription drugs, visits to your doctor, dental treatments and prescription lenses among others.

2. Do not claim moving expenses just because you moved closer to your new place of employment. To qualify for a tax deduction for moving expenses, you must have moved 40 KM closer to your new workplace.

3. Do not throw away your tax receipts. While you do not have to submit your receipts to the CRA if you electronically file your tax return you still have to keep your receipts in case the CRA asks to see them, or in the event of an audit.

4. Tax laws change every single year, and you need to be aware of which changes will affect you. To do this, visit the CRA website to see the new tax deductions and credits for the year.

Do you want to know how to increase your personal return tax savings? This article discusses how to save taxes on your Canadian personal tax return.

Contribute to your RRSP

RRSP contributions are tax deductible and any income earned inside your RRSP is tax- free. The 2019 maximum RRSP contribution limit is $26,500. To find out your specific 2019 RRSP limit, either call the CRA at 1800 959 8281 or check your 2019 notice of assessment.

Take Advantage of Tax Credits for the Kids

The second amongst the top five ways to save taxes on your 2019 T1 is to take advantage of tax credits for kids

File your 2019 Tax Return on Time

The filing deadline for the 2019 tax year is April 30th, 2020. If you miss this deadline you will be paying a penalty of 5% on the balance owing plus 1% of the balance owing for each month that the tax return is past due.