3 Top New Year’s Tax ResolutionsBrian Jang ON January 9, 2017
Now that the New Year is here, many people are picking their resolutions. Getting healthier, losing weight, quitting smoking—these are all great ideas for sure. But now that 2016 is in the books, this is also the time of year folks are starting to plan for the upcoming tax season. If you are hoping to make the most of your money, here are the top New Year’s tax resolutions to help you save big time.
What is a Tax Resolution?
Like most New Year’s resolutions, a tax resolution should also help make your life better in some way. And of course in this case, improving your situation means keeping your money away from the taxman.
So what exactly is a tax resolution? Basically, it is anything you can do to reduce your income. Your tax bracket is determined by how much you earn yearly. So if your 2016 income is going to push you into a higher tax bracket, you’ll want to take steps to shrink it.
The below tips should help point you in the right direction. But if you want to get the inside scoop on all the latest tax benefits you can qualify for, it’s always a good idea to consult with a tax advisor. They will ensure your New Year’s tax plans don’t get dashed like so many resolutions often do.
Tax Resolution #1: Contribute to an RRSP
Looking to make the most out of your financial situation this year? When it comes to your tax preparation goals, one easy way to minimize your tax burden is to boost contributions to your registered retirement savings plan. Contributing to an RRSP will not only allow your money to grow tax-free, but also decreases your personal income amount. The maximum amount that you can contribute to an RRSP for 2016 is $25,370.
Tax Resolution #2: Start a Home Business
If you are planning to rake in a pile of tax deductions this year, then you might want to consider launching a home-based business. Why not? You will be able to claim a portion of the stuff you’re already shelling out for anyway, including property taxes, home repairs, mortgage interest, utilities, vehicle expenses, and more. And if you pay your spouse or your kids, you’ll be able to split income, allowing you to lower your net income, and putting your business into a lower tax bracket.
Tax Resolution #3: Donate To Charities
Another easy way to get a tax deduction is by donating to a charity. Just make sure that the organization you plan to go with is registered; otherwise, you won’t qualify for the tax break. And remember, if your total donations surpass $200.00, you’ll get the highest tax rate. You can also take advantage of the over $200.00 requirement by pooling your charitable donations with your spouse.
Well, there you have it—some good tax saving tips to help see your New Year’s resolution through. With a little planning and some handy advice from a tax resolution specialist, you’ll increase your chances of putting more money in your pocket in 2107.
Need help planning your New Year’s tax resolution? Contact BCJ Group, Chartered Professional Accountants for a free consultation today!