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Ken Green - TaxEfficientWealth.ca

Ken's Weekly Top 5 - Issue # 97

Published 3 months ago • 4 min read

This week, the government of Ontario announced the biggest spending budget in the history of the province. Although the budget does not include any new changes to the corporate or personal tax rates, it extends the gasoline tax and fuel tax rate reductions which will remain at nine cents per litre until December 31, 2024 (instead of June 30, 2024). Click here for a summary of the key budget highlights. Have a great Easter long weekend and enjoy this week’s issue. Don’t forget to share this with everyone in your network:

1. Steps To Build Tax-Efficient Wealth Webinar

If you missed the previous webinar, don’t worry, I have another one coming up on Saturday, April 6th. I will be hosting a special webinar to reveal a 6-step framework to build tax-efficient wealth. This framework is simple (but not necessarily easy) to implement and it will enable you to minimize taxes and accelerate your cash flow and wealth. This is a short 40-minute LIVE webinar on Saturday, April 6, 2024 at 4 PM Sharp! For more details and to register, click here. I look forward to seeing you at the webinar.

2. Three ways to save taxes by changing your facts

Did you know that the majority of tax laws are written to motivate certain behaviors? The government will use tax laws to levy more taxes. But it will also use tax laws as tools to shape the economy by promoting social, agricultural, and energy activities. The government wants the economy to grow. To achieve this goal, the government provides incentives to people to engage in the activities that will drive growth in the economy. The wealthy understand this. So, they take advantage of these tax laws and engage in the activities that provide tax incentives. And by doing this, they save a lot in taxes. The poor and the middle class don’t understand this. They don’t see anything good in the tax law. As a result, they miss out on many tax incentives hidden in the tax law. If you want to save on taxes, you have to model what the wealthy are doing and engage in similar activities.. In this article, I share three ways to save on taxes by changing your facts. Read it here.

3. Are You Ready To File Your Personal Tax Returns?

In the recent survey I completed on personal income taxes, 47% of you said you will be filing your taxes yourself, while another 24% plan to use a friend to help file their taxes. As technology continues to improve, we believe that this trend will continue to grow in the coming years. The truth is that filing personal taxes is not the hard part. What may be challenging is getting the appropriate insights from your tax returns that will enable you plan better going forward. As you file your tax returns this year, here are some questions to consider:

  • What’s the dollar amount I paid in taxes?
  • What’s my average tax rate?
  • What’s my marginal tax rate?
  • Why did I get a refund? Why did I NOT get a refund?

And when you have answers to these questions following the filing of your tax returns, you want to consider your next action steps. For example, what steps can you take in 2024 to pay less taxes than you did in 2023? This is where insights come in handy. As I’ve said many times, when you don’t get insights, you end up paying more in taxes than you’re required to and a dollar lost in taxes today will not only cost you a dollar today, IT WILL COST YOU A MULTIPLE OF THAT DOLLAR OVER TIME!

If you’re looking for INSIGHTS to help you minimize taxes, then consider the Personal Tax Services we offer. With our services, we can help you minimize taxes, improve cash flow and get ahead financially. Get the details here.

4. Know Your Marginal Tax Rate and Save On Taxes

Did you know that you could plan your affairs to save on taxes if you know your marginal tax rate? The Canadian tax system is based on marginal tax rates. This simply means that the more money you make, the more taxes you pay. As your income increases, so does your marginal tax rate. Marginal tax is the dollar amount of tax you pay on any additional dollar of taxable income.

For example, based on the rates in the table above for someone that lives in Ontario and earns $50,000 of employment income, you would be in the 29.65% marginal tax bracket and you would pay 29.65% in taxes for every dollar you earn above $48,535. If you earn $100,000 of employment income, you would be in the 43.41% marginal tax bracket and you would pay 43.41% in taxes for every dollar you earn above $97,070. By knowing your marginal tax rate you can save money by intentionally planning to keep your income from being taxed at a higher rate. To read the full article I shared on this, go here.

5. Do You Own A Corporation With A December 31 Year-end?

As some of you may know, we provide a number of services for corporate clients and it’s that time of the year when corporations with a December year-end should start organizing their documents to compile their financial results, estimate taxes, plan their cash flow for the new year and several other things. While we obviously help corporations with the tax compliance work of filing their annual corporate tax returns, we do provide other additional value-added services such as:

  • Streamlining and automating the majority of your bookkeeping processes
  • Doing a cash flow and budget analysis for your corporation
  • Estimating corporate tax liability and developing a plan for installment payment of your taxes
  • Corporate tax planning including how to invest corporate dollars and how to properly use insurance within your business to mitigate risk and plan for retirement
  • Corporate restructuring to ensure you’re organized in the most tax-efficient way
  • Remuneration planning to ensure you’re taking money out of your corporation in the most tax-efficient manner
  • How to use your corporation as a nest egg for your retirement in a tax-efficient manner.
  • And many more…

If you’re looking for solutions for your corporation consider working with me and my team at GMS Professional Corporation. Check out our standard service offering for corporations here. And when you’re ready to have a chat, book a time with me here.

Ken Green - TaxEfficientWealth.ca

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