Don’t Let Your Tax Obligations Make Your Success a Failure
A lot people work very hard to become financially successful with the hope of being solid financially when it comes to their retirement years. In many cases these individuals who have worked hard to gain their financial success become frustrated with what they consider unfair tax obligations.
Most often they have worked many long hours that has incurred overtime for them, yet these endeavours have ended up putting them in a higher tax bracket, so instead of being rewarded for their efforts they just end up paying more taxes. More often than not this leads many creative and enthusiastic individuals to basically just throwing in the towel and only working the minimum hours required of them.
Instead of doing this the smarter choice is creative tax planning. There are ways that one can legally reduce their tax obligations but it is a matter of knowing what the tax incentives are and what changes you would need to make to qualify for these. This is just one of the reasons why those who are intent on getting ahead in life financially will choose a good quality Toronto accountant to assist them with their business bookkeeping, tax returns, and planning financially for the future based on their current circumstances.
Not all wealth comes from working hard. It could have come from an inheritance or investments. Each of these have their own tax implications, and once again knowing the tax laws concerning them can help with the tax issues surrounding them.
Some of the creative tax planning techniques that we have discussed in the past has been income splitting. This again comes with some complex rules but it could still be an opportunity to change the tax situation of the higher paying tax family member.
Another possible option is when you have some financial responsibilities for family members like grandchildren for example, instead of just giving them money as a gift is to make an income distribution to them by way of a trust. As it generates income it can be paid to the grandchild, with the deduction being made from the trust income and taxed at the rate applicable to the recipient which will likely be a lower tax rate.
Rather than give up on your financial success because you are tired of a good portion of your money going to the tax man, call Sam Seidman here at Toronto Accountant and let us help you get the most from your tax dollars.