Defining Taxable Income
Defining Taxable IncomeTaxable income is the amount of income on which you actually pay income taxes. There are several reasons why you don’t pay taxes on your total income: First, not all income is taxable such as profit you make on your residence and the profit you earn on money invested in RRSPs and Tax-Free Savings Accounts (TFSAs). Second, you get to subtract deductions from your income.
Here are a few ways to reduce your taxes and increase your deductions:
1. Contribute to RRSPs and retirement plans
2. Claim child care expenses: $7,000 for children under 7, $4,000 for children 7-16
3. Annual union and professional fees: claim regular annual dues
4. Business losses can be claimed to reduce income
5. Interest on investment loans (Not RRSPs)
6. Married versus common law: Research options include spousal RRSP
7. Moving Expenses
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