Planning for 2022 to save tax in 2023

CAPITAL OR INCOME?

Capital gains, interest and dividends are not all taxed the same. Each client should adapt their investments to take into account their tax impacts.

He must also take into account his liquidity needs, for example if he expects to need a down payment to acquire a residence. Conversely, as you approach retirement, your client needs to protect their capital, while remaining exposed to the growth of their portfolio.

YOUR RRSP, TFSA, RESP

Not everyone is making full use of the opportunities offered by the RRSP and TFSA.

Granted, your customers have time to benefit from the deductibility available this year, but why wait until February 2023? They can grow their savings without waiting.

As for the TFSA, all amounts withdrawn in 2021 can be reinvested as early as 2022, without waiting any longer.

Finally, the RESP is attractive when you have children or grandchildren. Saving now in an RESP for them can generate more money for their studies.

DEBTS, LESS TAXES

Paying less taxes by taking on debt is possible, but on very specific conditions. Interest paid on an investment loan or a debt related to a business activity is deductible. This is not the case for interest paid in connection with a mortgage or a personal car loan.

But such a strategy must be analyzed by a professional, in order to ensure the eligibility of these loans. In any case, this adds a dose of risk, which is not recommended for the majority of investors.

SHARING INCOME WITH FAMILY

Income sharing within the family makes it possible to transfer to the partner with the lowest income a part of the income of the partner who earns the most. This can consist of paying the mortgage or bills in order to allow the other partner to place his money and make it grow. If your client is in business, he can pay his partner or children in wages.

However, it is difficult to transfer or sell investments from one partner to another. The assistance of an expert is essential to measure the tax impact of each of these transactions.

ADVANCE PAYMENTS, WITHOUT DELAY

When an advance payment is requested from your customer, he must comply without additional delay. This payment must be made in advance. However, employees who have become self-employed may be used to having their tax deducted at source. But once they have transferred to their account, they must provide for the payment of tax by instalments.

But why pay his advance payments? Simply because it will save your customer from heavy penalties for late payment!

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