Brian Quinlan, partner at Campbell Lawless LLP

Focus: Tax Planning
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TIPS FOR TAX SEASON

Tax and investment income

• Make use of tax exempt savings vehicles (i.e., TFSAs) and tax deferred vehicles (i.e., RRSPs, RDSPs) and tax saving investments (i.e., flow through shares) and enhance yield!
• Tax efficient investing – know the various tax rates on the various sources on investment income.
• Income splitting
• Interest deductibility

Take steps to put tax plans in place.

• Most plans will be forward focused as they require some restructuring of who owns what assets.

Life-cycle tax planning

• Tax planning through life evolves – student, single, married, new baby, more children, divorce, senior, taking care of parents, your illness, charitable giving, planning for death (estate planning)
• What tax strategies impact you as you age and “cycle through” life stages.

ANY CHANGES TO THE TAX CODE SLATED FOR THIS YEAR?

• Federal tax rate down 1.5 per cent (from 22-to-21.5 per cent) of income tax bracket of about $45,000 to $90,000.  The tax saving is $680.
• Federal tax rate up 4 per cent (from 29-to-33 per cent) on taxable income over $200,000.
• Seniors - the home accessibility tax credit – save up to 15 per cent on fist $10,000 of expense to make home easier to access, increase mobility and decrease risk.
• Raising children: Family tax cut – or income splitting tax credit is not available in 2016 and later years/Child fitness and art credits cut in half for 2016 and deleted for 2017.
• Education and textbook tax credits – not tuition - being eliminated in 2017.  Any carryforward amounts from 2016 and prior years can still be claimed in 2017 or future years.
• Principal residence – reporting of sale on tax return.

TOP DEDUCTIONS THAT PEOPLE FORGET ABOUT

• Caregiver tax credit and family care giver tax credit - credit available for taking care of parents in your home.
• Deductions for legal fees in certain instances.
• Deductions for accounting fees.
• Requesting a disability tax certificate

BIGGEST MISTAKE PEOPLE MAKE WITH TAXES 

• Poor organization of tax affairs
• Lack of patience
• Not keeping proper documentation

TAX-LOSS SELLING 

• Deals more with year-end tax planning.
• Net losses against gains incurred in the year.
• Capital loss carrybacks and carryforwards.

WHAT PEOPLE SHOULD BE DOING FOR TAX PLANNING?

• Look forward to tax planning for 2017 and subsequent years. 
• While there is some tax savings still to be had for 2016 the big saving potential is in the future years and may require some “restricting of the ownership of assets
• Who in your family owns what assets and how best to transfer them.