2021 Year-end Tax Planning Opportunities
The continuing pandemic has been the main driver behind many government tax and spending policies designed to assist individuals and businesses negatively impacted by the unpredictable economic situation. There has been much speculation about income tax increases in future years to recover pandemic costs. Whether those increases result in changes to capital gains inclusion rates, personal tax rate increases, adjustments to the principal residence exemption, corporate tax rate increases, or some other tax measures to target extreme wealth inequality, no one can predict the changes with any certainty. The information contained in this document is accurate at the time of writing (October 2021) and the Canadian government may introduce new tax measures before the end of the year. Despite the uncertainty of future tax policies, taxpayers can take actions based on the tax legislation that is in place today before federal and provincial governments introduce changes. With deadlines fast approaching, now is the time to take advantage of tax-deferred growth opportunities, tax-advantaged investments, and charitable-giving opportunities, among other strategies, to maximize deductions and credits for your tax situation. Reviewing your investments in light of your goals, the tax policy environment, and the economic landscape can help you and your advisor see where adjustments need to be made to position yourself for 2022 and beyond.
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