Tax reduction strategies - where to start?
Hi,
Apologies if these questions are basic..expecting downvotes, but here goes:
I am a returnee to Canada, I spent most of my adulthood in another country overseas. I came back here in 2018 after a decade away. I'm mostly unfamiliar with Canadian tax law / Canadian investing so I'm asking here first to get some additional perspective before I start digging deeper.
My situation:
Currently renting a 1BR apartment near Toronto and have been living in the same place since 2019 with my common law partner from Japan. I currently support her financially as she does not yet have a work permit / PR (She's here legally, and we have a PR application in progress which we expect will succeed, but IRCC moves very, very slowly. It may take another 12-24 months).
Currently earning +-120k / year including bonuses and work remotely at an Ontario company. I have some side gigs which produce a bit of cash income, not a lot.
We couldn't stand living in this tiny apartment anymore, we don't really like Ontario, and the RE market has been tanking so after a year of searching, I bought an affordable house with some land in PEI with 5% down and we're moving there this month or next. Will have around $20,000 in savings left after the move is complete. I expect to be able to continue to save or invest around $2000-$2500 / month after expenses. That sounds like a lot, but keep in mind I need to provide for my spouse and think about retirement stuff etc. as well, and we have no idea when she'll be able to start working legally.
I will continue to work at the same Ontario company though I'll need to pay the difference for PEI taxes which will be fairly substantial. While the mortgage payment and utilities at the new house is still going to be much cheaper than a suitable rental in Ontario would be (And Ontario houses were out of our price range), the jump from 2019 to 2023 shelter and utilities costs stings.
Aside from the Smith Maneuver, which I cannot yet leverage (Not enough equity), based on the above information, are there any legal options available to me, federal or provincial, that can reduce my taxes? IIRC I usually get a refund of around $3,000 at tax time - this will probably change to +$2,000 owing once I start filing from PEI.
Have been banking with BMO since I got back to Canada and they've been beyond useless for advice on this kind of thing.
Note: I'm looking specifically for advice on legally reducing taxes in our to-be situation - we're fine in terms of budgeting / saving, though I'm open to advice on tax-reducing savings strategies.
Edit: I'm not intending to create a tax reduction scheme based solely on redditor advice - I would just like to hear some of the common options and research them before I discuss with a tax professional. Googling this stuff results in endless pages of blog and ebook spam
Posted Jan 4, 2023, 6:22 PM UTC · edited