10 November 2025
Tax Planning Strategies
Essential Tax Planning Strategies for Canadian Businesses and Individuals
Strategic tax planning can result in significant savings for businesses and individuals. Understanding and implementing the right strategies helps you minimize tax liability legally while avoiding costly mistakes.
Tax Planning vs. Tax Preparation
Tax Preparation: Reactive filing of last year’s return
Tax Planning: Proactive year-round strategies to minimize taxes
The best approach combines both for maximum savings.
Individual Tax Planning Strategies
RRSP Maximization
Tax-deductible contributions reduce taxable income. Investments grow tax-deferred. Contribute early for maximum growth.
TFSA Strategy
Tax-free growth and withdrawals. Perfect for emergency funds, short-term goals, and retirement income without affecting OAS.
Income Splitting
Shift income to lower-earning family members. Use spousal RRSPs, pension splitting (65+), family trusts. Complex rules apply—consult CPA.
Maximize Deductions
Claim all eligible items: home office, medical expenses, donations, childcare, moving expenses, professional dues.
Business Tax Planning Strategies
Business Structure
Incorporation offers Small Business Deduction (lower tax on first $500K), income splitting, tax deferral, liability protection.
Expense Deductions
Claim all business expenses: rent, salaries, professional fees, insurance, vehicles, marketing, equipment. Keep detailed documentation.
Strategic Timing
Defer income to next year, accelerate expenses before year-end, time bonuses strategically (within 180 days if accrual).
LCGE & SR&ED
Lifetime Capital Gains Exemption: $971K tax-free on business sale. SR&ED credits: 15-35% of R&D expenses.
Year-Round Tax Planning
? Keep Excellent Records: Use cloud accounting, digitize receipts, separate business/personal accounts. Keep for 6 years.
? Review Quarterly: Don’t wait for tax season. Assess payments, identify deductions, adjust strategy.
? Stay Informed: Follow CRA updates, work with CPA who stays current on tax law changes.
Common Mistakes to Avoid
? Waiting until last minute – Start planning early in the year, not in March/April.
? Focusing only on tax savings – Consider overall financial health, cash flow, retirement, estate planning.
? Not seeking professional advice – Tax laws are complex. CPAs maximize deductions and ensure compliance.
? Ignoring provincial taxes – BC rates differ from other provinces. Account for both federal and provincial.
? Poor documentation – Keep detailed records to support tax positions if CRA questions them.
Professional Tax Planning Services
J. Wang CPA provides comprehensive tax planning for Vancouver individuals and businesses. 20+ years of experience navigating Canadian tax law.
Free Tax Planning Consultation
We’ll contact you within 24 hours
Start planning early and maximize your tax savings—contact us today.
