Saving On Your Personal Tax Return In Canada: Two Tips You Cannot Afford To Ignore

According to the 2014-15 Annual Report of the Canada Revenue Agency, twenty-eight million tax return applications were submitted for the year twenty-fourteen, and twenty-two billion dollars were transferred to twelve million beneficiaries. Here are a few handpicked suggestions that are to greatly reduce your burden when filing a personal tax return in Brampton or wherever you may require.

  • Maximize RRSPs

Make an annual contribution to your Registered Retirement Savings Plan or RRSP to the stipulated ceiling amount (also known as the RRSP limit) for the year. The RRSP limit of your current year is always stated on the Notice of assessment for the previous year.

It may be worth noting that RRSP contributions are treated as tax deductible and that essentially means any gains and income yielded by the RRSP will not be taxable. It necessarily makes a room for tax savings at the time of submitting your personal tax return and grows your retirement savings sans any tax.

However, do make a point to never over contribute to the RRSP, as the excess amount will be subjected to a one percent monthly penalty. You may consider learning more about how to effectively contribute to an RRSP by consulting a personal and corporate tax return advisor in Brampton or wherever you are to need.

  • Purchase a property tax-free with the help of a home buyers’ plan

Most of the first time home buyers are blissfully clueless about the fact that they could really afford to readily access a pre-fixed amount of their RRSP fund for purchasing a property without the requirement of spending on tax on their RRSP investments needed to be withdrawn to pay for a down payment. This particular strategy is known as the HBP or home buyers’ plan.

The maximum permissible amount that a person is allowed to borrow from one’s RRSP for the purpose of purchasing their first-ever property is twenty-five thousand dollars. Pay close attention to the term borrow as it necessarily means that the sum an individual is to withdraw from one’s RRSP must be repaid back over fifteen years, in equated annual payments. This compulsory yearly disbursement starts from the second year, i.e., precisely a year after when you shopped for the home.

You may consider knowing more about how to effectively leverage the true potential of the HBP by visiting a personal and corporate tax return consultant in Brampton or wherever you want.