Tax Effective Strategies

Included here are just a few of the strategies that could help you maximize the after-tax return on your investments and lower your overall tax bill.

Strategy #1 - Consider Carrying Forward Deductions

Once RRSP contributions are maximized, keep in mind that deductions for RRSP contributions can be carried forward indefinitely to a future tax year. Carrying forward your deduction may be beneficial where you expect your taxable income to be higher in the near future and the deduction will be worth more to you.

Strategy #2 - Tax Exempt Life Insurance

Life insurance products offer attractive investment options for tax sheltering your savings. The Income Tax Act allows for the tax-sheltered accumulation within insurance contracts, subject to certain maximums. You can take advantage of this tax-sheltered growth to meet your various insurance needs (such as RRSP/RRIF Insurance, Capital Gains Insurance, Business Insurance, etc) as well as to provide for future income.

Strategy #3 - Charitable Giving

Charitable giving allows you to give to the charity of your choice while providing a reduction to your tax bill. Charitable donations of up to 75 percent of your net income qualify for tax credits, thereby reducing your tax bill. Additionally, for donations made after May1, 2006, the capital gains inclusion rate is zero. If the gift is made at the time of death or through your estate, the donation can be claimed as a credit that is up to 100 percent of your net income. There are many ways to make substantial donations, such as gifts of cash, shares of publicly traded securities and life insurance products.

Use our Find An Advisor tool to locate a CIBC Wood Gundy Investment Advisor near you and take the first step to achieving the financial future you want.

The information contained herein is considered accurate at the time of posting. CIBC and CIBC World Markets Inc. reserve the right to change any of it without prior notice. It is for general information purposes only.

Clients are advised to seek advice regarding their particular circumstances from their personal tax advisors.