Generally, tax planning for all types of income is beneficial. For investment income, there are tax-sheltered accounts like the TFSA and the RRSP that provide options for individuals to protect their assets. Although useful, there are several rules and options afforded to these types of accounts, and considerations like income over the course of an individual's earning timeline as well as the estimated income at the start of retirement come into play. Consulting a financial planner with tax resources is most valuable in utilizing these instruments as they can project estimates, consider compounding interest, and use sophisticated projection tools that handle complex calculations to optimize tax outcomes. In order to reduce your tax obligations during your working years and in retirement, a tax expert can also assist you in making the most efficient withdrawals from these accounts. They make sure clients get the most out of their tax-sheltered accounts and steer clear of unnecessary taxes on investment gains by carefully negotiating the tax regulations pertaining to various investment income types.

A dedicated tax professional will have intimate knowledge of the tax credits available, and provide year-round assistance filing taxes, for their tax clients. Preparing and submitting the necessary documents is crucial for claiming tax credits and deductions. A good tax service will have a request listing sent before tax time with a list of questions to answer. These various questions can often be missed when an individual uses software or tries to do their return on their own. These questions will go further than asking for example “Did you have any medical expenses this year?” and ask more detailed questions such as “Did you have any deductibles on your health insurance this year?” Things like this can easily be missed. Year round service is the difference between a tax service, and a dedicated tax professional. A tax professional is available to their clients to help fill out forms, or assist if the T1 is re-assessed. In order to prevent clients from losing out on any credits or deductions, they might also offer advice on tax-saving tactics for upcoming years. Clients routinely improve their tax condition with this continuing assistance.

The complexities with property income is not solely the income, but rather in the area of the claimable expenses. Much like a business a rental property owner can expense related costs such as property management expenses, travel costs, supplies and asset purchases, and much more. Although these costs lower taxable income, it’s crucial to maintain detailed records and receipts for each item that is claimed. There are also some separate forms for CCA (For asset claims) and vehicle usage that require additional information that a tax service could help organize.

Innova Wealth's services accommodate individuals who prefer to handle filing their own taxes while offering support from tax experts.

Capital gains are an income type that can take on different forms depending on the asset type. A tax professional will know to ask what kind of asset sales were done in the year, or if a principal residence was sold. They will then know how to properly fill out these forms. Further they will know how to find and access the reserves CRA has on file for potential tax savings, net capital loss bank, corporate reserves, et cetera.