According to a new RBC Tax Planning Poll, only 42% of Canadian families with children age 12 and under take full advantage of tax savings.
There is 17% of Canadian families who have absolutely no idea of the options available to them.
In order to save efficiently, we have to look at all of our options, which include tax savings. By taking advantage of the available tax credits and incentives, you can maximize your tax returns and put that money toward saving priorities.
A great option is opening a Registered Education Savings Plan (RESP), allowing you to save for your child’s post secondary education tax free until they attend university or college.
Opening a Tax Free Savings Account (TFSA) is also another great choice because it allows you to grow money tax free, up to $5,000 a year. You can also carry unused contribution room forward to future years and any money withdrawn will also be added to unused contribution room. Any money withdrawn from your TFSA is still tax free which is a great benefit.
With a Registered Retirement Savings Plan, you can save for your retirement and not worry about any contributions being taxed; only the amount withdrawn can be taxed.
The options mentioned here are among the more popular means of tax savings. By using any method of tax savings you will be allowing yourself to maximize every dollar.