BUSINESS

33 - Wednesday, April 27, 1988 - North Shore News

Ensure that tax return thrill returns next year

JUST BEFORE the thrill (of finishing last year’s tax return)
is gone, consider a few simple steps now ta ensure the thrill

* returns next year.

dollars
and sense

Mike Grenby

Ottawa is determined to reform
the ways we pay tax, It scems only
fair that we shauld be equally’
determined to reform the ways we
don’t pay tax.

Much of tax reform is still in the
proposal stage. But barring an
election which ousts the ruling
Tories, most-of. the following ap-
proaches should apply.

Before you act, contact a tax
advisor or the local tax office (if
you get an uncertain reaction, ask

‘for a supervisor) to check for any

jast-minute changes.

Deductions” have largely been
replaced by credits this year, A
deduction saves more tax the
higher your tax bracket; a credit
saves you the same tax whatever
your tax bracket.

{An educational thought: if you
support.a post-secondary student,
make sure he or she gets tuition

FINAL BIG
WEEK!

receipts: credits of up to $600 may
be transferred’ to parents or
spouses.)

There will be only three tax .

brackets. You will pay about 26
per cent tax on your first $27,500
of taxable income, 40 per cent on
the next $27,500 and 45 per cent
on the rest.

That means if you have $35,000
taxable income (typically: total in-
come of around $40,000 a year),
shifting $5,000 of that income to
somebody in the next lower tax
bracket will save $700. Shift that
$5,000 into the hands of somebody
who has no taxable income and
you'll save $2,000.

How do you split income and
save tax? Let me count the ways:

(4) Contribute (o a spousal reg-
istered retirement savings plan.’

(2) Put the children’s family
allowance payments into accounts
in their names so the interest will
be theirs for tax purposes,

(3) Use a registered education
savings plan for tax-sheltered

ENDS
APRIL 30

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Page 36

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