Tax Planning

“You have to learn the rules of the game. And then you have to play better than anyone else.”

– Albert Einstein

Tax planning impacts all areas of your finances. Decisions involving the timing of income, the purchase and/or the sale of an asset, selection of investments and the way you save for retirement, all play a role in managing your current and future tax obligations.

The primary purpose of tax planning is to explore ways to accomplish the objectives of your financial plan in the most tax-efficient manner possible, allowing all elements to interact more effectively. However, while minimizing income tax is a common goal of any financial plan, it is important to not let tax be the only reason for deciding whether to implement any one strategy.

Another purpose of tax planning is to estimate the future tax liability of your estate to ensure there is adequate liquidity to settle all liabilities. Minimizing taxes due at death to maximize the value of your estate for your heirs is also a common goal of tax planning.

RECORD TYPE: Charitable Donations

You can receive tax credits (Federal and Provincial) for all donations made to a registered charity by December 31st of the applicable tax year. You can also receive tax credits for any unclaimed donations made in the previous 5 years. The amount of tax credit you will receive is determined by the amount and type of donation made. Use this Charitable Donation Tax Credit Rates Table to calculate your charitable tax credit.

Suggested Action: Upload a copy of all Charitable Receipts that you or you spouse/partner make throughout the year.

RECORD TYPE: Tax-Saving Transactions

Many of the strategies your advisors will recommend are structured to reduce or defer income tax, this could include tax efficient investing, how you structure your retirement income and estate strategies. Maintaining records of the transactions you make will help you confirm the results achieved are in-line with your expectations.  

Suggested Action: Upload a copy of all Tax Saving Transactions and expected results undertaken as part of your financial plans.

RECORD TYPE: Tax Returns

Generally, you must keep all required tax records and supporting documents for a period of six years from the end of the last tax year they relate to. In addition to confirming your RRSP and TFSA contribution room, your financial planner may want to review several years of tax returns to determine if there are any opportunities to reduce your tax bill.

Suggested Action: Upload a copy of all Tax Returns, supporting documents and any correspondence you may receive from the Canada Revenue Agency (CRA) regarding your annual return.

RECORD TYPE: Assessments

A Notice of Assessments is provided by the Canada Revenue Agency to taxpayers and includes details on the amount of income tax you owe. It also includes details on tax credits, RRSP and TFSA contribution limits, and other information.

Suggested Action: Upload a copy of all Notice of Assessments received from the CRA.

NEXT Steps

  • Download Resources
    Click the Resources to download and print the various worksheets and templates applicable to your needs. Set aside some time over the next few days to complete each one. Remember to involve your partner/spouse should you have one.
  • Gather Documents
    Complete each worksheet or template and gather other statements and documents for each type of Record to be uploaded to this Tile.
  • Upload Documents
    Using a scanner or the Sidedrawer Mobile App, upload all statements and documents to the appropriate Record for secure storage and collaboration with your family and trusted advisors.
  • Add Collaborators
    From the Sidedrawer home screen, click on the Collaborator icon to add someone you wish to give access to one or more of your Records. Enter their email, name and relationship to you, then select the Record and permissions to be granted.

Click here to print the Tax Planning Document Checklist.

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