How To Beat The Taxman On A Budget

Paying taxes to the Canada Revenue Agency (CRA) is the duty of every individual in the country. If this process is not taken care of on time, it could create an adverse situation. So, to avoid receiving a penalty from the CRA, you must stay on top of your books. Besides, if you manage your money wisely, it could lead to paying minimal taxes and receiving a sizable rebate from the taxman.

Consequently, if you would like to save between $0 to $20,000 on taxes, keep reading to learn a few tips and tricks from The Tax Shop Inc. on how to beat the taxman on a budget.

Know the rules
It’s essential to develop your financial IQ to understand the difference between assets and liabilities. Also, stay updated with the latest changes in tax regulations for your state, which will give you a fair idea of how the system works.

Determine your cash flow
Calculate how much you can comfortably spend from each paycheck on groceries and entertainment, and earmark the remaining cash for savings, investments, and to pay off any debts.

Create the plan
Design a short-term and long-term strategy to manage your money. You should make a forecast of what you expect to spend over the next twelve months. Also, have one eye on the future and plan accordingly for any financial goals you may have further down the line.

Invest in tax-free instruments
There are many tax-friendly and tax-deferred vehicles available on the market, so start to investigate which ones are best for your needs. It would help if you aimed to allocate more money for tax-free investment accounts rather than keeping excess cash lying around in regular savings accounts where there is very little interest.

Monitor your progress
After chalking out your plan, it’s vital to check on your progress at regular intervals. Sometimes if your goal is too frugal, then it may be challenging to stick to it. On the other hand, if you like to splash the cash, you could leave too little for tax saving.

Make changes as required
After taking stock of your situation, don’t be afraid to tweak things. If you need some assistance with this, a financial planner and an experienced accountant can help you plan accordingly.

On a final note, by following these steps, you will save your hard-earned money, which can create a nice nest egg to enjoy during your golden years. If you need any help in addressing a tax issue, email us at taxshopinc@primus.ca. At The Tax Shop Inc., we specialize in monthly/quarterly tax monitoring and tax return preparation. We also take care of accounting, bookkeeping, payroll, and tax strategies for clients. For more details about saving tax in Brampton, Mississauga, Milton, Oakville, Toronto, Burlington, Guelph, Halton Hills, Caledon, Vaughan, Markham, Aurora, Newmarket, and Erin, ON reach out to The Tax Shop Inc., or get in touch with us by clicking here.