Income tax planning

Doing one’s taxes can feel like a chore, however, the job can be much simpler if you keep all your documents in one location. In addition, tax software can significantly simplify the annual process. (Note: we offer members a 20% discount off the regular price of Turbo Tax online tax preparation software.)

You can even file some returns by phone. See the Canada Revenue Agency website for more information.

And if you get stuck, there is a wealth of tax information and tips available through Canada Revenue Agency, which even has volunteers to help low-income individuals complete their tax returns. Find information on financial slips and summaries -- ranging from RRSP contribution details to Return of Investment Income (T5) information -- on the Canada Revenue Agency's Financial slips and summaries webpage.

Your tax situation can, however, become complex. So, it pays to consult an expert to ensure that you get full benefit of the savings available to you.

Tax efficient investing

For most people, an RRSP or RRIF is the most tax efficient way to invest. But when Tax Free Savings Accounts (TFSAs) were introduced in 2009, the available ways to invest tax efficiently got more complex. We can help your choose a strategy and a mix of investments that matches your personal situation and your goals.

Tax planning and retirement

Pension income splitting is one tax-smart way for your family to share retirement savings. It’s a way to equalize family income during retirement if you have eligible income. By keeping both incomes nearly equal, or in the same tax bracket, you and your spouse will minimize your total tax bill.

Spousal RRSPs are another option. With a spousal plan, you make contributions to a special plan for your spouse, and deduct your contributions. Your total contributions to your own plan and the spousal RRSP can’t exceed your allowable maximum contributions. Contributions you make immediately belong to your spouse. If they leave them invested long enough, their withdrawals can be taxed in their name rather than yours.

We can help you choose income strategies that save tax and match your personal situation.

Tax planning for families

The Canada Child Tax Benefit (CCTB) is a tax-free monthly payment made to eligible families to help with the cost of raising kids under age 18. The Universal Child Care Benefit (UCCB) is a taxable monthly payment to eligible families with children under age 6. You can use both to shift income into your child's hands.

You can invest CCTB and UCCB payments in your child’s name. The investment income earned can then be taxed in your child’s name, usually at a much lower rate than you would pay.

If you want to invest other money for your kids, consider using a Registered Education Savings Plan (RESP). Your investment can grow tax-deferred. Or, use an informal trust. Unlike income such as dividends or interest, capital gains earned in an informal trust can be attributed to your child under the right circumstances. The gains will be taxed at the child’s rate.

If you're caring for a dependent child or another relative who is dependent on you, you may be able to take advantage of some tax breaks. These include tax credits for an infirm dependent, for an eligible dependent, for a child or for being a caregiver. And, tax deductions for child care and/or medical expenses.

For advice on how to minimize your taxes and maximize your investments, a Vancity investment professional is available at your local branch.

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