8 questions to ask your tax advisor for a better tax season

EY's personal tax guide available now

TORONTO, Dec. 14, 2015 /CNW/ - As Canadians bask in the final weeks of December and look forward to 2016, it's a perfect time to get ahead by being proactive about tax planning. According to EY's Checking in on the "tax lifecycle": Year-end tax planning, asking your tax advisor better questions before end of year may lead to tax savings in 2015 and beyond.

"Some of the most impactful tax savings come from looking forward and thinking of the bigger tax picture throughout the year," says David Steinberg, EY Tax partner and National Private Mid-Market Co-leader. "The end of the year can sometimes be a hectic time, but there are clear benefits to tax planning at this time of year. First, it can minimize cut down on surprises during tax season in April. And second, it can help you understand whether you're achieving your longer-term, broader financial goals."

Reviewing estate planning goals and wills on a regular basis, for example, is a leading practice, and now is the perfect time to review and assess the potential impact of new rules announced by the federal government on the taxation of testamentary trusts and estates, as well as charitable planned giving.

Also, now is the time to review remuneration planning and consider taking dividends or salary in 2015, as a result of proposed changes to  the highest marginal tax rate for 2016 as recently announced by the new federal government.

EY has identified the top 8 questions Canadians should ask their tax advisors in order to plan for a better tax season:

  1. Are there any income-splitting techniques available to me?
    Determine if you can take advantage of differences in tax brackets and marginal rates in your family with income-splitting loans or reasonable salaries to family members.

  2. Have I paid my 2015 tax-deductible or tax-creditable expenses yet?
    There are a variety of expenses, including interest and child-care costs that can only be claimed as deductions in a tax return if the amounts are paid by the end of the calendar year. You'll want to check on expenditures that give rise to tax credits and consider if the deduction or credit is worth more to you this year or next. 

  3. Have I maximized my tax-sheltered investments by contributing to a TFSA or an RRSP?  
    Make your TFSA and RRSP contributions for 2015 and catch up on prior non-contributory years. In order to maximize tax-free earnings, consider making your 2016 contributions in January.

  4. Have I maximized my education savings by contributing to an RESP for my child or grandchild?
    Make registered education savings plan (RESP) contributions for your child or grandchild before the end of the year. With a contribution of $2,500 per child under age 18, the federal government will contribute a grant (CESG) of $500.

  5. Is there a way to reduce or eliminate my non-deductible interest? Interest on funds borrowed for personal purposes is not deductible. Where possible, consider using available cash to repay personal debt before repaying loans for investment or business purposes on which interest may be deductible.

  6. Have I reviewed my investment portfolio?
    Consider if you have any accrued losses to use against realized gains and determine if you have realized losses to carry forward. 

  7. Can I improve the cash flow impact of my income taxes?
    Determine if you're eligible to request reduced source deductions and see if you're required to make a 15 December instalment payment.

  8. Have I thought about my estate planning?
    End of the year presents the perfect time to review and update your will and consider if there are changes to your life insurance needs. It may be the right time to consider an estate freeze to minimize tax on death and/or probate fees. Developing a comprehensive succession plan can help you pass the benefit of your assets to the right people at the right time.

More personal tax tips are available in EY's Canadian Personal Tax Guide.
To read monthly EY tax insights, tips and tricks, visit ey.com/ca/taxmatters.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

For more information, please visit ey.com/ca. Follow us on Twitter @EYCanada.

EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

SOURCE EY (Ernst & Young)

For further information: Sasha Anopina, sasha.anopina@ca.ey.com, 416 943 2637; Julie Fournier, julie.fournier@ca.ey.com, 514 874 4308; Leigh Kjekstad, leigh.kjekstad@ca.ey.com, 604 648 3807


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890