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8 ways retirees can save on taxes
There are many tax benefits available to you. And there are
many strategies you can use to reduce your taxes. These are
just a few of the things you can do.
If you’re over 65, depending on your income,
you may be eligible for the federal age tax credit on your
income tax return. Be sure to take advantage if you can. Remember that your first $1,000 of pension income
is eligible for a provincial credit as well as a federal tax
credit. Again, be sure to take advantage. Although you may not have qualified for the GST
credit when you were working, now that your income is lower,
you might qualify. Look into it. Remember that when it comes to taxes, all income is not
equal. Income earned through dividends or capital gains
receives favourable tax treatment, so you should ensure
your non-registered investment portfolio includes equities.
Use income splitting wherever you can. Perhaps you
can avoid or at least reduce OAS clawbacks by shifting a portion
of your investments to the lower income spouse. But be careful
how you do it for attribution rules will apply. Another form of income splitting: Whenever you can,
consider maximizing spousal RRSP contributions. And contribute
each year as long as one of you is still under 69. Whenever you’re considering withdrawing additional
income from a RRIF or other plan, keep this in mind. That
extra income could impact your eligibility for various government
programs such as age credits, GST credits, OAS and more. Always
check first. Maximize your deduction for any charitable donations
you and your spouse made by combining them on one tax return.
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