Probably by now many of you who are entitled to your Old Age Security are in the midst of making a decision based on the new CRA offering of being able to defer this pension for a period of 5 years.
Before you make that decision it may be wise to speak with a Toronto Accountant and have this expert review your tax situation to assist you in making your choice. Recently the Canada tax government has offered those who qualify for the OAS the chance to put off receiving their monthly payment for a period of up to five years.
Depending on your particular tax situation it could have some potential benefits for you. If you are in a high income bracket, then not receiving your OAS payments now it could bring you down to a lower tax bracket which means you would be giving less of your hard earned money to the government. Plus, as an incentive for doing this for every month you delay a payment, you will receive a 0.6% increase in the amount you will receive when you do claim your payments once again. It doesn’t seem like much, but if you defer your entitlement for the maximum allowed which is 5 years, then you will enjoy an increase of income of 36%.
Now when you look at these figures this way it starts to look a little interesting. However, do keep in mind that delaying your payments also means you will not be eligible to receive the Guaranteed Income Supplement as well as there are some other conditions.
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As you can see there are a lot of factors that really need to be considered before making the decision to defer your OAS or not. This is why putting your tax matters in the hands of a Toronto Accountant is so important. This expert will be able to explain what the potential benefits or pitfalls may be for you concerning your tax situation based on your OAS decision.
There are a lot of things that you really need to consider with this type of decision, and without knowing where you stand with your tax situation it can be easy to make the wrong decision.
