Pay Less Tax

By on February 24, 2013

Pay Less Taxes

Taxpapers
Like all Canadians, you pay your fare share of taxes. You need to know that there are legal strategies to lower your taxes.

As a business owner, you have even more choice and options to save tax dollars.

 

While you are working you can access…

  • Health & Dental Plans – Health & dental insurance premiums are a 100% write-off to the business and are a non-taxable benefit to the employee.
  • Private Health Spending Program – These structures allow your business to pay for many medically necessary expenses, including dental & vision coverage. There is a small administration fee associated with these plans and that fee is far lower then paying taxes.
  • RSP – Savings designed for retirement. All income is tax sheltered during your saving phase. Your benefit is that all money placed into a RSP will qualify for a tax refund at year end.
  • TFSA – Savings designed for pre-retirement or after retirement. Interest is tax sheltered.
  • IPP – Individual Pension Plan. This is for people who are high earners and have maximized their RSPs. The rules a are similar to RSPs and you can place more funds into these structures
  • Charitable giving with life insurance – This concept allows you to have a tax deduction annually or at death. In addition you leave a legacy for your favourite charity and the premiums are usually a lot less than the tax bill you would have paid.
  • Guaranteed Life Withdrawal Income – Allows you to save funds with a minimum 5% annual guaranteed increase to your account value.
  • Alternative investments that can be placed inside your RSP, IPP or TFSA

 

When you retire and start accessing your money you can use your:

  • RSP at a high tax rate
  • TFSA with no tax payable
  • Savings and investments – Tax is payable in income generated annually
  • Annuities – Taxed at a much lower rate then income from savings or investments
  • Capital Dividend Account – Through this notional account, most life insurance proceeds entering your corporation can flow out in a tax free manner. These funds can pay for many needs arising from the death of a principle share holder
  • Guaranteed Life Withdrawal Income – Taxed similar to savings and adds a guarantee of annual income starting after age 65
  • Combine an annuity & life insurance – The annuity will increase your after tax income and the insurance can replace the money used to purchase the annuity. Further, the Life insurance money will enter the capital dividend account, thus lowering taxes payable by your corporation and estate.

 

At Marathon we help you choose the best combination of solutions to fit your family’s needs and plans.