Pay More Tax: Have Less Money

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Pay More Tax: Have Less Money

Doesn’t that seem like an unnecessary and obvious statement? We all know this, but I can tell you that the majority of Canadians do not pro-actively plan to keep their taxes as low as possible.

In the last few weeks of the calendar year, we always see a seemingly never ending series of articles and blogs showing you how to do some last minute tax savings. This is great for reading, but very few people actually act on these, or can act on these that late in the year. Don’t let this happen to you.

Continual tax planning is the only way.

The easiest tax planning in the past was RRSPs. Today, many people are doing less RRSP contributions, opting to put their first investments into Tax Free Savings Account (I wish they would take the “Savings” out of the title; so misleading). This decision is usually made quickly, without actually knowing what is best for your tax situation. Some strategy is needed.

If you earn over $200,000. the new planned tax increase could hurt you if you don’t lower your taxable income. One choice is an RRSP contribution. This specifically works if you can get your earned income back under $200,000.

There are guaranteed income investments that treat your first 20 years of income as a return of capital, thus no tax. This is much different that many trust units that also offer a Return of Capital. These positive, lower risk products don’t seem to get much press and are seldom on the front page of a google search. Those who do not understand or offer all Return of Capital products quickly poo-poo them by lumping all Return of Capital Products together.

Take the time to actually sit down with an independent full service investment advisor to craft a plan that is best for you.

Too many articles, blogs and google searches only show you a sliver of what is available. As you know, most only read the first page of google, which is almost always articles by the big, narrow focused institutions. I wrote about these institutions in my blog on October 2015.

While these ideas can be very advantageous to implement, you want to work from the full menu of choices. Setting up your plan to have the right tax strategy and right products is a must to complement your personal needs.

Here is a list of some tax lowering strategies that must be considered for your personal well being:



Dividend Income

Capital Class Mutual Funds

T-SWP Mutual Fund Income

Segregated funds

Return of Capital income

Charitable Donations (there is more than one way to help you reduce taxes with this option)

Tax loss selling

Limited Partnerships

Certain Insurance Policies

Proper Incorporation and Income from your business (especially with expected changes to CCPC businesses).


You also have to be aware of what the government is planning to change, and how to best handle these changes.

Not all firms and advisors offer all the products that can help you. You should have the complete range to work from in one place. If you end up with someone with limited ability and choices, you will have only part of picture. You will have to meet with more than one narrow market advisory service provider to find all your choices.

You will then have to weigh the pros and cons of each of their biased views on your own. You will more than likely end up with a non-focussed/non-integrated plan that won’t be ideal for you. This usually causes a lack of confidence. Not being confident with your plan causes anxiety and sleeplessness, which will be detrimental to your personal well being.

Working with the right professionals

A good advisor is not just willing, but insistent on working with your other professionals, such as lawyers and accountants. A cohesive team effort will serve you better.

YOUR INDEPENDENCE MATTERS and if you want to see what a truly independent investment/insurance advisor can do for you, call me at 905-846-9060, ext.3838, email me at or visit my website at