In short, yes. Being an expert in all things regarding taxes, tax lawyers are knowledgeable in ways to minimize tax obligations. In addition, their expert advice ensures that you are not paying more tax than needed. They are also skilled in negotiating directly with CRA officials if there are disagreements about your tax liability.
What is tax liability? It is the total amount of tax owed by individuals and corporations to their federal, provincial, and local governments. There are specific avenues available that can help with reducing your tax liability, such as:
- Sheltering tax income in RRSPs or TFSAs.
- Life Insurance
- income splitting with immediate family
- charitable contributions
- prescribed rate loans to a spouse
- prescribed rate loans
- Designation of principal residence and principal residence tax exemptions
- individual pension plan (IPP)
- Home Buyers’ Plan (HBP)
- Lifelong Learning Plan (LLP)
These are just a few tools that can help you minimize taxes owing. However, who do you go to use these different strategies to your advantage? Do you go to a financial planner, tax consultant, accountant, or tax lawyer?
Keeping up with the daunting task of optimizing your tax liability can be a full-time job. With all the constant changes in laws and regulations, it can get confusing if you don’t have the time or expertise to navigate the ever-shifting landscape of these options to use to your advantage. The goal is to make your financial plan as tax-efficient as possible and will allow you to reach your financial goals. Having a professional on your side is essential to help find out which strategies may benefit you the most.
One daunting aspect of tax planning and optimization is that current tax laws and strategies that are in place today may not be the same in the future. Therefore to stay current with the rules that will benefit your financial plan and react to new changes and tax rules requires a professional to maximize allowable contributions. While a tax lawyer can represent and present your case before the tax authorities, some will offer services to reduce your tax liability through tax mitigation strategies with the expert lens of a master of the legal aspects of tax law in Canada.