Thinking About Taxes Then and Now
Of course being in the midst of tax season means that you are focusing on getting your taxes done for the past tax year. It always takes time to gather up all the pertinent information you are going to need for your return, and at the very least you may be waiting on some tax slips that you need to include in your income. At the same time that you are thinking about last year’s taxes you should also be thinking about this current year.
By the time most people get their taxes filed and over with for the year, we already finishing our fourth month of the current year. Ideally before the year even started you should have been thinking about some tax planning so you can find ways to keep more money in your pocket rather than in the tax department coffers.
It isn’t too late though, as any changes you make now in your current tax year situation is still going to be beneficial to you.
Perhaps you are thinking of doing some investing. You want two things from this. One is to pay as little taxes as possible on the proceeds from the investment, and the other is you want something that isn’t too risky and likely to bring you some return on your money.
There are investment venues like the stock market, property, or even foreign investment. If you haven’t invested in the past, then all of these may seem a little scary to you, simply because you are not familiar with them. You may opt for property because you feel a little more knowledgeable about this. However, buying property for personal use or for investment is two different things.
Rather than go for the stock market you may feel that bonds is a little more to your liking. These are something that have been around for years so you feel a little more stable with these. Again you are going to have some choices that will affect your tax situation. You can buy bonds that are part of a registered plan or you can buy outside of these.
There are two ways of making money off these bonds. You can make money from the interest that will be paid on them yearly, then you can make money off them if you sell them at a higher price than what you bought them for. On the interest that you collect you will have to pay the applicable taxes. If you make money when you sell them, then you will have capital gains to deal with, but if you sell them for less then you will have a capital loss.
This is just one example of doing some tax planning which includes investing. Your tax planning should also include way that you could cut your tax bill down. Using a good quality Toronto accountant to assist you with your taxes is a good starting point and can also include some tax planning tips.