Koroll & Company Blog

For many Canadians, just thinking of the Canada Revenue Agency (CRA) can give them a headache. But, while the tax man isn’t everyone’s favourite person, they do play an important role in the Canadian tax system.

The CRA administers tax, benefits and related programs - all while ensuring each Canadian is compliant and receives no more or less than that which they are entitled to.

That is why the CRA offers a number of tools and resources to help business owners, like you. Koroll & Company has listed some of those here. 

While many Canadians are focused on filing their 2018 tax return, it is important to also remember to plan and strategize for the year ahead.

To do this, you must first make note of the applicable tax brackets, credit rates and limitations, contributions and premiums that will apply to you and your specific situation in 2019. 

Unlike tax deductions that reduce your taxable income, tax credits reduce your tax owing (your taxable income multiplied by the applicable tax rate). There are two types of tax credits – refundable and non-refundable.

A refundable tax credit means that the government will return the unused portion of your tax credit to you if your tax owing becomes $0 without using the full amount. 

Registered Retirement Savings Plans (RRSPs) and Registered Pension Plans (RPPs) are retirement savings tools that help you plan for your financial future.

Knowing the similarities and differences between the two is critical to understanding their tax treatment.

Pension Income Splitting is a tax planning tool that can be used by taxpayers over the age of 65 (and in some cases 60) to reduce their tax liability and increase their eligibility for government benefits.

This is done by “splitting” their pension income with their spouse or common-law partner.

This can be one of the most effective tax planning tools for seniors but, unlike the Age Credit and Pension Income Credit, is underutilized as many seniors are unaware of this tax saving opportunity. 

Planning for the future is critical but, when developing your savings plan, it is important to consider other factors such as your current financial situation and tax planning, as well as your short-term and long-term goals.

There are a number of saving tools available to Canadians, depending on your goals – Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), Registered Education Plans (RESPs), Registered Disability Savings Plans (RDSP), Pooled Registered Pension Plans, and more. 

January is over and the deadline for your 2018 tax return is soon approaching. While you are probably eager to say goodbye to the past year and look ahead to all that the new year has to offer, you still need to take one final look back at 2018 before you put it out of sight and out of mind.

Before you settle into 2019, you will have to complete your 2018 tax return. In most cases, once December 31 hits, you have lost your opportunity to leverage the last minute tax planning strategies that will fully optimize your return.

There is, however, one tax planning strategy you have in your toolbox to ensure you make the most of your 2018 income tax return - Registered Retirement Savings Plan (RRSP) contributions.

When it comes to planning for your financial future, Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs) are some of the most common and useful savings tools available to Canadians.

But before you decide where to put your money, it is important to understand the similarities and differences between the two.