Tax Planning

We all have to pay taxes, but they can significantly reduce returns on investments, which can impact your portfolio. Savvy tax-planning strategies can be a major component of your financial plan, potentially giving you extra cash to meet your needs and wants. To encourage Canadians to save more, the government created several tax-favoured savings alternatives. Tax-deferred investment accounts include Registered Retirement Savings Plans (RRSPs), company-sponsored pension plans, Individual Pension Plans (IPPs) and Tax-Free Savings Accounts (TFSAs). Investing on a tax-deferred basis means paying taxes later rather than sooner. Any appreciation or interest earned on these investments grows without being taxed. Of course, funds generally become taxable upon withdrawal (except in the case of TFSAs, from which withdrawals are tax-free). While most investments are ultimately taxable, deferring taxes can potentially result in substantial gains over time. Taxes on income, such as dividends or interest must be paid annually in non-registered plans.

We can help you understand the tax implications of various investment options so you can take advantage of the most tax effective ways to meet your objectives. Not all investment income is taxed equally, and as a result, where you hold your investments matters too. Here are some of the most common types of investment income:

Using tax effective strategies when choosing your investments may help you reduce or defer the amount of tax incurred. Please contact us to schedule a confidential meeting to discuss your investment management.

While we are familiar with the tax provisions of the issues presented herein, as financial advisors of Raymond James, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.