Being proactive about tax planning is the best way for clients to save.
If they use saving strategies throughout the year, says Gabe Baron, senior manager of tax at EY’s private mid-market practice, tax time will be much less stressful.
To help clients, you can offer the following tips.
Consider income splitting at the start of the year. The cash benefit of splitting income comes from Canada’s graduated tax rates. It’s best to restructure people’s investments to report income at a family member’s lower tax rates, as well as to review the complex tax rules associated with income splitting.
Routinely review bank statements. Reviewing financial statements throughout the year means clients will be better prepared to make tax claims. Encourage them to keep and file all relevant receipts.
Making RRSP contributions early. That way, clients can benefit from extra tax-free growth on investment money. Business owners, on the other hand, should consider making a single July payment each year since they’re required to provide estimated quarterly tax payments for the following tax year.