HERE ARE THE TOP FOUR WAYS YOU CAN REDUCE YOUR TAXES:
Maximize your RRSP
The deadline for contributing to your registered retirement savings plans is March 2, 2020. Anything you contribute up to that point will help reduce your tax bill. And the limit for contributions for 2019 is 18% of your 2018 earned income, to a maximum of $26,500.
Maximize your RESP
Did you know that for every $2,500 you contribute to a registered education savings plan you can receive an additional $500 from the Canada Education Savings Grant (CESG) until your child turns 17? And that the lifetime maximum amount of CESG a child can get is $7,200? And you're allowed to carry forward unclaimed CESGs for future years? And RESPs can be kept open for 35 years?
If you haven't accessed the grant for your children yet you still can - you just can't top it up all at once.
Put money in a TFSA
Tax free savings accounts are another option for reducing your tax footprint. The maximum contribution amount for 2019 is $6,000. But because contribution allowances do roll forward, if you haven't used a TFSA in the past, you are eligible to make a contribution of up to $63,500.
Make a charitable donation
Charitable donations off-set your taxes while giving back to the community. Did you know that you can donate an approved stock in-kind to a charity instead of giving cash? This is one way you can reduce or avoid your capital gains tax. The legislation for charitable donation tax credits were updated in 2016. The Government of Canada website has lots of information. If you'd like to learn more — they even have a calculator you can use.
Are you part of a Foundation?
We have one more thing you should be thinking about – and that's your foundation's annual disbursement. The disbursement quota is the minimum calculated amount that a registered charity is required to spend each year on its own charitable programs or on gifts to qualified donees, such as other registered charities. The disbursement quota calculation is based on the value of a charity's property not used for charitable activities or administration. As you can see here, the disbursement quota is calculated at 3.5% of average property value.