BMO Financial Group
TSX : BMO
NYSE : BMO

BMO Financial Group
BMO Nesbitt Burns

BMO Nesbitt Burns

September 10, 2013 07:00 ET

BMO Nesbitt Burns: Tax Planning Needed Year-Round

TORONTO, ONTARIO--(Marketwired - Sept. 10, 2013) - With the 2013 tax year now two-thirds complete, BMO Nesbitt Burns reminds Canadians that effective tax planning is a year-round activity. By being forward-thinking, doing some research, and identifying the credits and deductions that apply, Canadians can reduce their 2013 tax bill.

"Tax planning should not only be considered during the traditional tax filing season," said John Waters, Vice President, Head of Tax & Estate Planning, Wealth Planning Group, BMO Nesbitt Burns. "There are many ways Canadians can proactively reduce their 2013 tax bill. One way in particular is by working with a financial professional who can provide custom-tailored wealth management strategies that include tax planning considerations."

BMO Nesbitt Burns offers tax planning tips to be considered year-round:

Payment of Quarterly Tax Instalments
  • Individuals whose estimated income tax payable for the year (or payable for either of the two preceding years) exceeds $3,000 ($1,800 for Quebec residents) may be required to pay income tax instalments.
  • Personal tax instalments are due four times a year, with the next instalment due September 15.
  • Canadian investors are often required to make instalments since tax is not deducted at source on investment income. If an investor falls short on any required instalments, he/she could incur non-deductible interest or penalties.

RRSP Contributions for those turning 71
  • Individuals who turn 71 years of age must collapse their Registered Retirement Savings Plan (RRSP) by the end of the calendar year.
  • Such individuals should consider taking advantage of a final contribution into their RRSP before the end of the year, assuming unused contribution room exists.
  • Seniors and/or retirees should also take note of some of the important tax changes in recent years (such as pension income splitting, the amendments to Old Age Security and the Canada Pension Plan and the introduction of the TFSA) that may impact their tax planning.

Consider tax credits
  • Many individuals are eligible for a variety of tax credits. Some of the lesser known credits include:
    • Equivalent-to-Spouse Credit: If single, divorced or separated, you may be able to claim your child under 18, or another family member who lives with you and is a dependant, as an "equivalent-to-spouse" for tax purposes.
    • Disability Credit: Those with a severe or prolonged mental or physical disability that significantly impedes their ability to perform routine tasks of daily life, can apply for this credit.
    • Caregiver Tax Credit: Canadian families providing in-home care for a dependant adult relative may be eligible for a caregiver tax credit, provided the dependant's net income is below certain thresholds.

Consider tax deductions
  • Some necessary out-of pocket expenses can be used to reduce your overall tax bill. Some of these common expenditures which are eligible for tax relief include:
    • Childcare Expenses: Fees for daycare, summer camp or boarding school for children under 16 can be deducted if parents are either working or attending school full time.
    • Medical Expenses: You can reduce your tax by claiming a tax credit for either all or part of an expense related to a medical impediment. Among the lesser-known medical expenses are guide dogs for the blind, bathroom aids, attendant care, a portion of the cost of an air conditioner to ease a severe respiratory ailment, incremental expenses to provide accessible housing and tutoring services for those with a certified learning disability.
    • Moving Expenses: If your move brings you a minimum of 40 km closer to your new job, expenses such as movers, renting a truck, cost of breaking a lease, storing furniture, legal fees, real estate commissions and the cost of food and hotels while moving can be claimed as deductible expenses.

Get the latest BMO press releases via Twitter by following @BMOmedia.

To learn more about our comprehensive wealth management approach, please visit www.bmonesbittburns.com.

Contact Information