Year-end tax tactics are numerous and may be quite lucrative if you act before year-end. Many of these tax tips will be covered elsewhere. In this article, I’ll look at a few lesser-known, but equally lucrative, year-end strategies that will be of interest to higher net worth investors, businesspeople, and executives.
Defer tax on interest
The Income Tax Act allows a deferral of tax on an interest-bearing investment for one year after its purchase, unless the interest is paid or credited to a taxpayer's account in the meantime.
For investments on which interest payments are deferred (e.g., payments that occur once or twice a year), it may make sense to make the purchase early in the New Year, rather than late in the current year, since this means that at least a portion of the interest payments will be “kicked over” to the next year. [Read more.]
This article was originally published by Samantha Prasad on The Fund Library.