Tax Myths

RESP’S

  • Registered Educational Savings Plans are not a tax planning tool.
  • They can increase tax payments upon withdrawal for both the child and the contributor. The investment aspect can also be in question.

TFSA

  • Tax Free Savings Accounts can save you a very small amount of taxes now but cost you much more in tax savings in other areas.

INCORPORATING

  • It is important that you are incorporating is for the right reason.
  • Incorporating may prove to be an expensive situation to get into and out of later with little or no tax savings.

RENTAL INCOME

  • Rental income is a long term investment which may lead to greater tax savings later. It is not a vehicle to produce expenses to create an immediate tax advantage now.

SELF EMPLOYMENT

  • The purpose of self employment is to create income. Self employment to create a loss may lead to difficulties in the future.

CANADA REVENUE AGENCY

  • The information provided by the Canada Revenue Agency for the majority of questions may be correct. A recent survey shows that 25% of the answers on the telephone are incorrect.
  • The basic problem is they do not either understand the question nor know the whole story.

TAX SOFTWARE

  • Tax software is only a tool for tax preparation not unlike a hammer in building a house. Proper tax preparation requires a plan to save tax dollars. A tax plan requires an architect to¬†build a firm foundation.
  • Tax preparation software provides no accountability or recourse other than the Canadian Revenue Agency

Our Guarantee

We take care to ensure that your tax return is prepared correctly. In the event that an error is made, we will correct that error with Canada Revenue Agency for you. If the error was ours, we will credit you for all interest/penalties assessed by CRA. These credits will be applied to the next year’s tax preparation fee.