Income Tax Alternatives

If you are filing a personal tax return for 2016, you should know by now, or shortly, if you owe Canada Revenue Agency money or if they will be sending you a cheque. You are probably pleased if you are receiving a refund instead of having to pay, but the less you receive as a refund from CRA, the better.

You don’t want CRA to use your money all year and then pay you back your money without interest. If you make regular RRSP contributions throughout the year, you can complete a form with your payroll department at work to reduce the amount of tax that is deducted from each of your paycheques. So, you really could be keeping more money in your pocket each payday instead of receiving a lump sum after you file your taxes.

Some people like the lump sum and use it as a bonus or for holidays, some use the refund for their annual mortgage prepayment without penalty, some use it to boost their TFSA (Tax Free Savings Account), but, consider this option that would put you in a better financial position at the end of the year.

You could take the extra cash that you are savings every paycheck and putting it to use immediately; for example, increase your mortgage payment by that extra amount, contribute to your TFSA on a regular basis (same frequency as your paychecks) and you can dollar cost average into the markets and be making money all year, or, you could take the savings and invest in your own emergency or holiday fund and make a few dollars in interest.

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This information has been prepared by Carol Plaisier Investment Advisor for HollisWealth®, a division of Industrial Alliance Securities Inc. and does not necessarily reflect the opinion of HollisWealth®. The information contained in this website comes from sources we believe to be reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces where she is registered. For more information about HollisWealth®, please consult the official website at

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