Top 10 tips on saving Tax

While you earn, there is always one thing playing on your mind and that is how much tax will be debited of your income and how can you save on your taxes? There are different avenues to tax deduction schemes and each can help you plan on your tax savings. Tax is imposed upon an individual, especially an employee (a private firm or government office), by the government of that country for its smooth functioning.

There are various ways to reduce your tax amount, and in turn, you can keep the money safe in your pocket.

  1. If you are registered for the registered retirement savings plan (RRSP), your income will remain exempted from tax till you have any funds remaining in your plan. This plan enables you to save for your retirement by saving on your taxes.
  2. As long as you keep contributing through your income and stay within the limit, you end up paying 0 taxes on earnings from investments.
  3. Do you know about the Public transit amount? How often do you or your family members commute using bus, train, subway? You can avail the benefits of the Public transit amount by getting a non-refundable tax credit for your expenditure on these public transport systems.
  4. If you are a pensioner and want to save on your taxes, break the pension income into 2 (50%) with your spouse and thus you can reduce on the overall taxes you pay.
  5. If you are in the trading business, you can avail benefits of tax savings by getting a deduction on a part of the total cost of eligible tools bought throughout the year.
  6. If you’ve bought a new house recently, you can check out the new schemes released on saving taxes on home buyer’s amount.
  7. There are many countries which offer benefits to single parents for the upbringing of their child and thus they save on their taxes to some extent.
  8. If you are self-employed and have just purchased a computer for your business, why don’t you avail the benefits of the 100% computer capital cost allowance?
  9. If you work as an apprentice to your employer, you may get yourself subscribed for a prescribed trade in the first 2 years of your apprenticeship and you’ll be qualified for a non-refundable tax credit.
  10. Are you into a business which is not a child care services business, but you are licensed to create child care spaces for the children of your employees? This may enable you to avail the investment on tax credit for child care spaces for each new child care space you have created.