Are you maximizing your tax free income? Â Do you write that cheque to CRA with a joyful heart?
I don’t think anyoneÂ particularlyÂ likes to pay tax; however, many of us don’t miss simple tax planning steps. Â For instance, did you know that in Canada the CRA introduced a tax-free vehicle for financing the health care costs of employees? To cover a $100 expense, a top BC bracket income earner would need to earn over $180 in pretax income! Â Using the CRA introduced tax-free vehicle you would eliminate the $80 of income tax. Â However, using the medical tax credit program on your tax return would remove almost nothing. Â Even for a low income earner, the benefits of the tax-free vehicle are that besides reducing any income tax you may be paying, you would likely benefit for larger HST rebates, larger family benefits such as Canada child tax benefit type benefits and others.
Given a typical Canadian family spends between three and seven thousand on health care, the savings by implementing a tax free health account can be substantial. Â Even if the lion share of these costs are covered by a spousal group plan, there are significant savings to be had and best of all in many cases no insurance premiums required!
If your interested in more details, please call me as I have been using and recommending this planning for over 5 years.