We came across a great article the other day, and we’d like to share it with you! The article had some good tax tips that might help you save money on your next tax return.
The first smart tax tip for Canadians is to spend less. Sounds obvious, right? However, reducing the amount of GST and provincial taxes is one of the most overlooked factors when trying to reduce your overall tax bill. To start reducing your purchases, you first need to see what areas you are spending the most in. For one month, keep track of your spending in different categories such as groceries and house goods, dining, entertainment, monthly recurring bills, and non-essential items (new clothes, video games, etc.). If you find you are spending a large sum in any category other than your monthly recurring bills, this would be the first place to start cutting back.
Another interesting piece of advice is to avoid getting a large tax refund. That may sound strange, but the logic used in the article says that if you are getting large tax refunds, you might be paying too many taxes up front, and you’re essentially giving the government an interest-free loan. The money from your tax return would be better off garnering interest in your own bank account. You can ask your employer for a T1213 Form to reduce the amount of taxes taken off your paycheque each month. Use this extra money from your paycheque to pay on your mortgage or open a high-interest savings account.
The article also suggests that you should invest in your children’s education. You don’t receive a tax deduction for opening a RESP (registered education savings plan). However, the earnings will grow tax-free for up to 25 years!
To read the full article, “20 Smart Tax Tips for Canadians”, click here.
Be sure to check our blog again for many more smart tax tips. At Kustom Design, our mission is to help Canadians save money on their taxes and gain financial freedom!
About Kustom Design
Kustom Design is a group of interconnected companies, each company striving for the same goal: to provide excellent Accounting and Financial products and services to help clients SAVE on taxes, properly manage their finances and ultimately, achieve Financial Freedom and Lasting Wealth. The Kustom Design Group offers a complete line of products and services in key areas of accounting, finance and tax; from accounting, consulting and strategic planning to financial and tax education.
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