The top most tax tips, that we can give you, is to think about tax savings all year long. Just not at the time of tax filing. Tax saving strategy that you could have taken for 2007 has passed on December 31st, 2007. So, if you want to save on your tax liability for 2007 its already too late. But its not late for your 2008 tax return. So, plan your tax strategy from today, right now. So, you will be able to save a bundle on your 2008 tax return.
All the tax saving tips that you see from January to April in the media, newspaper and other publications are not really your tax strategy. It is the tax strategy of the Banks and other financial institutions. They are not working for you. They are all working for their own interest. For example the frenzy you see in January and February among the Financial and Investment companies for a share of your RRSP savings are for their bottom line. For example, they lure your savings with a 4% return on your investment. After all the management and administrative fees they charge you to manage your RRSP investment, you will be lucky if you get a 2% return on investment. On the other hand, they will invest in 12% to 18% interest earning vehicle for themselves. That is why, while your investment is not growing, Banks and other Financial institution are making huge profit months after months.
On the other hand, is RRSP tax free?
No.
RRSP contribution is tax free, because you are
promising the government that you want to save for long term and the
government let you put aside the tax liability on that savings for now.
So, you pay less tax current year. The money grows in your RRSP funds
and government watches it from sidelines. As soon as
you are allowed to withdraw funds from your RRSP savings, your RRSP
savings and income becomes fully taxable. Now you probably
pay more tax on your RRSP than you saved over the years, because it has
grown over the years.
Call us for consultation how to really save money on your tax and grow it tax free.
(* We are not an investment or offshore company, but we will give you information that no one will.)
