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How Can You Save More With A Proper Tax Planning?
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A good deal of tax saving is possible through proper tax planning in different types of investments. If a person wants capital gains on the transfer of any capital asset, whether a movable or an immovable property he can save a good deal of income tax by proper planning of investments. Below are some more creative and mostly used deductions available for proper tax planning?
Most people are not able to claim a deduction for mortgage interest, but it’s possible to deduct your mortgage interest by carrying on a business from your home. You don’t have to leave your job, but using your home as your principal place of business for selling some type of product or service on a part-time basis or using your home on a regular or continuous basis to meet customers will allow you to claim a deduction for part of your mortgage interest.
It’s usual in the first couple of years of a business to incur losses. These losses can be applied against any other type of income. You can’t create or increase a loss from home office expenses such as property taxes or mortgage tax, but those costs can bring your self-employment income down to zero and create a loss. Unused home office expenses can be claimed against self-employment income in the future.
When you use your own vehicle in your employment and you did not receive a tax-free allowance or reimbursement to cover those costs, you can claim a deduction for a portion of all your car costs which can include gas, repairs, oils, insurance, licence fees, auto club fees, interest on a car loan, lease costs, capital cost allowance and more. If the total of your car expenses is higher than this tax allowance, you can choose to include your unreasonable allowance in your income and then deduct your actual car expenses.
Most people are not aware of carrying charges that can be deducted which includes investment management and custody fees, fees paid to investment counsellors, safety deposit box fees, fees for recording investment income, tax preparation fees, interest on borrowed money used for business or to earn investment income and legal fees you paid relating to support payments that are owing to you.
Salary of an assistant
It’s possible to claim a deduction for wages or salary paid to an assistant if your employer requires you to pay for such a person’s services. You can hire your spouse or child to assume that assistant’s role as this can result in a sizable deduction against your employment income for amounts paid to that person and you’ll be keeping the money in the family.
Ken Donaldson is a Toronto tax specialist, who practices as an independent tax consultant. He is providing lots of information about how to manage tax planning. In this article you can find details information about canadian income tax. For more information visit taxca.com.
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