Taxation: Obstacle to Wealth Creation
On one hand we all know that governments perform some functions vital to our national, provincial and city functioning. On the other hand our tax system is replete with policies many people find to be confusing and complicated. Effective financial planning helps you to reduce your income tax burden towards the minimum permitted under the law. The law is so complicated and poorly understood that we often need a professional to help us decipher it and plan our present and future tax returns.
The table below illustrates the marginal tax rates for an Ontario resident in 2022. As you can see, the harder you work and the more you produce and earn, the higher the tax bill and the tax rate become, until income tax alone is eating over 50% of your earnings.
Fortunately there are many things we can help you do to reduce your income tax burden.
- reducing the tax on your payroll cheque
- making a tax plan for the coming year
- using tax deductions
- using tax credits
- income splitting techniques
- deferring income
- reducing the tax rate on investments
- reducing tax on your estate
- reducing tax on your heirs’ inheritances
- preparing tax returns (through McGruer Financial Foundations Inc.†)
Contact us to find out how you can use these ideas.
Who pays the taxes?
Who pays the taxes?