Did you know that you can defer your tax bill? Deferring your tax has many benefits but mainly, it can save you money in the short and long run. As we edge towards the time of year for filing our tax returns, now is a great time to let you in on a very useful piece of information. Let’s talk about how this is possible, especially for medical professionals.
Push Your Taxes
Are you someone who would like to keep those extra dollars in your pocket this year instead of paying your tax bill? Then you can simply push your tax into upcoming years if you wish. Hold onto your money instead of paying your tax bill and allow it to earn interest year after year. If you save $500 towards your tax this year but leave this to accumulate interest over a few years (dependent on your bank and interest rates), your initial $500 dollars will increase in value helping you with your payment in the future.
Retirement Pension Plan
It is vital to think about your future when your professional career ends. Those in the medical industry know more than anyone that life is short and it is important to be able to maintain a good standard of living after retirement. Be prepared for your retirement and give yourself a chance to thrive after caring for others for your whole career. Making a contribution to a Registered Retirement Savings Plan (RRSP), an Individual Pension Plan (IPP,) or even both means that you won’t have to pay tax on contributions until the benefits are paid out in retirement. At ILM, we will guide you through your pension plan options, depending on what stage of your career you are in.
Leave of Absence
At some point in our lives, a leave of absence from the workplace is required. Personal or academic sabbaticals are a high potential in the future, and are important for medical professionals especially! If this is something you predict may happen and want to be prepared, you can set funds aside for your future leave of absence known as a deferred salary leave plan. Talk to us today about this method of tax deferring.
Funds & Investments
As a medical professional, we know that it’s common for you to invest in healthcare stocks and sector funds. This can have a positive impact when it comes to tax season. Have you heard the “capital returned is capital gained” expression? When you receive a return on capital (ROC) you are not taxed until you sell your investment or until your initial investment is returned to you. Any interest income must be reported yearly but only in the year that is stated to do so.
There are many reasons why deferring your tax bill might be suitable for you and now you know the ways you can. Our main goal at ILM is to ensure we always have our client’s best interest at heart and advise you on a taxation guide that works for you and your finances.
Are you ready to use your tax in a way that can benefit you more every year? Reach out to our team, and we will work together to create a future that’s tailored for you.
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