Most taxpayers believe that they are paying too much tax. Paradoxically, taxpayers do nothing about it until tax time. By then, most tax savings opportunities are lost until the following year.

Many taxpayers are not very proactive with respect to tax planning. It has been suggested that most taxpayers only take advantage of one tax deferral mechanism: RRSP's. Many have never seen a tax advisor. The sad truth is that too many people pay more tax that the law requires. For example:

1.	Taxpayers miss out on many tax deductions and exemptions available to both the self-employed and employees.
2.	Taxpayers don't take full advantage of many RRSP strategies available to them.
3.	Taxpayers do not use legal tax shelters
4.	Taxpayers are not aware of the many income splitting techniques that are available to families.
5.	Taxpayers do not consider restructuring their debt in order to make their interest payments tax-deductible.
6.	Taxpayers are not aware of the options available to them in the area of education planning and how education planning techniques can result in effective income splitting with their children.

Generally, the main objective of tax planning is to ensure that income is taxed at the least cost. This usually involves leveling yearly fluctuations in taxable income, deferring taxation of income to a later year, maximizing deductions and credits, and coordinating tax strategies with family members.

Almost every financial planning question has a tax element to it. Tax planning strategies should be considered in the context of your overall financial strategy.

As with any financial goal, the proper approach is to focus on planning first, not just from one viewpoint, but by considering all aspect such as your retirement plans, education plans, goals, and major purchases.


The information contained in this commentary is designed to provide you with general information only, and is not intended to be comprehensive advice applicable to the circumstances of any individual. We strongly urge you to seek professional assistance before acting upon information included herein.