Can You Reduce Taxes on Your Income
Most people realize that paying taxes although unpleasant is really a necessity, if they want to enjoy the public benefits that the money from tax collection is supposed to bring. Your tax dollars are distributed through two levels of government which both contribute to many resources that we use on a daily basis. However, this doesn’t stop the tax payer from wanting to find ways to reduce their tax obligation because they simply feel that they are paying too much compared to their average earnings.
While the common tax savings are often taken advantage of there are still a lot of people that want more. One additional way of possibly finding a way of reducing the taxes from your income is through stock options.
Many employers offer shares in their Companies. The average income earner will at times ignore these thinking that this type of investment is only for those who have the extra income to invest. Yet, they can be a great way to reduce the taxes you owe to the taxman in regards to wages or salary. Why not put the money into something that is going to give you a return that you can use personally. Don’t forget that in the Government’s eyes when you are paying your taxes they consider this as an investment in your country.
There are rules and regulations that are applicable to these types of stock options, but you will probably find that only half of the capital gains applicable to them will be taxable
Make sure that you are not paying taxes related to costs occurred as a result of your employment that are being paid by your employer. You will find that you can deduct employment expenses on your return. These could be costs such as the use of your vehicle when related to work, or if you work from home for your employer you may be eligible for expense deductions there, depending on the number of hours this is done.
Something else that you may want to consider is having your employer withhold a higher amount of taxes each pay if you find that you always end up having to pay taxes at the end of the year. While this is not cutting down your tax obligation it does make it easier to have it taken off in small amounts rather than having to pay it in one lump sum. You may find though if you are having to pay too much in additional taxes at year end, that you should be paying tax installments.
These are all small but important tax issues that you may want to talk over with your Toronto accountant. If you have not chosen your tax accountant as yet why not give Sam Seidman a call here at 416-398-1700. We would be happy to assist you.