Tax Strategies for income tax season:

Business use of home

Often claimed by self-employed, employees and commission salespeople.

If you claim more than 50% business use of your home or make major structural changes to adapt it to business use, you may trigger a "change in use" rule, resulting in the loss of your principal residence exemption

Income Splitting

The Income Tax Act includes rules that cause income to be attributed to and taxed in another person’s hands. If you loan money to a spouse or related minor, the income earned from that money is attributed back to you and must be declared by you on your personal income tax return.

To further discourage income splitting with minor children, a special tax at top marginal rates applies to certain income received by children under the age of 18.

If you earn less than your spouse, keep a clear record of the source of your investment funds to ensure that your investment income is attributed to you. This could be accomplished by depositing your personal income into a separate bank account rather than a joint account. Then those funds could be used to make investments in your name.

RRSP

Contribute to your RRSP early in the year. If, for example, you contribute $13,500 at the beginning of the year instead of at the end over a 28 year period, assuming an 8% rate of return, you would have an extra $100,000. in your RRSP

Beware of the consequences when transferring investments to your RRSP. The Canada Revenue Agency treats such transfers as being similar to a sale of the investment. While deemed capital gains triggered by a transfer to an RRSP are taxable, deemed capital losses are not deductible. So instead of transferring a money-losing investment to your RRSP consider selling it, then contributing the cash to your RRSP and repurchasing the investment within the RRSP. This will crystallize your capital loss.