The Time is Now. The Question is How.
- by Monica J. Weissmann, CFP, CIM, MEE
Tax season is in full swing. Filling our tax returns for 2023 is a process that needs to be completed by the end of April (for individual investors). We will pay our fair share and go on with our lives. It is that simple. But is it actually?
Tax planning is a very powerful tool for the wealth of your family. Whenever tax planning is done well, it will support better funding of regular savings, paying money due on time, which will improve your credit score, increase the payment of not more than fair tax and much better peace of mind and better sleep at night.
Whether you do it yourself, or use the help of a tax professional, or a financial advisor, getting it done will always improve your family financial status.
I will summarize some of the main ideas presented by Jamie Golombek on BNN in a discussion with Andrew Bell. (see the link to this interview at the bottom of this page)
New rules for claiming expenses when you work from home: unlike the 2022 tax season, in 2023 claims are to be supported by calculations and documentation. It may take a lot of work for little savings from taxes, that you may ponder whether it is worth doing it.
New FHSA account (First Home Savings Account) which includes all benefits from RRSP and TFSA accounts, by allowing growth of investments, with no taxation at withdrawal time when the funds are used to buy your first home. This equals to $8,000 per year, for five years enabling $40,000 of capital to be invested and deducted from annual taxable earnings!
A better way for the “parent bank” to help their perhaps grown up children buy their first residence. This money can be a gift from the parents, an investment for the children and offer tax savings all in the same time.
If the money has not been used for the residence purchase for 15 years, it can be rolled into your own RRSP, even if you have no available contribution room.
All those with no residence ownership, should open an FHSA!
Call us for more information.
Reference: https://www.bnnbloomberg.ca/video/talking-tax-with-jamie-golombek~2877239
