What is Tax Planning?
The art of tax planning is to invest, save and plan in respect to being tax efficient. The analysis of your current financial situation is an important task if saving income ranks highly on your priority list. The purpose of a thorough tax plan is to reduce and/or defer the most amount of taxes paid by an individual or corporation in any given period of time with the fundamentals of their respective financial plan working together in the most tax-efficient manner possible. Decreasing tax liability and taking full advantage of your eligibility to contribute to retirement plans are both vital for accomplishing your financial goals and needs.
A crucial part of investment planning should consist of tax planning. A tax deferral strategy might be good plan for wealth & tax management purposes. It benefits an individual or company that wants to delay the process of having to pay tax at the present time and wanting to push it to a later date in the future. There are two advantages for deferring the payment of taxes: it’s a preferable financial scenario for certain individuals to pay tax dollars tomorrow than it is to pay today and the individual also has control of when he/she wants to pay the taxes instead of letting the Canada Revenue Agency (CRA) decide.