Don’t Pay Unnecessary Taxes: 6 Tax Minimization Tips for Dentists 1. Invest in your clinic to maximize deductions By purchasing new equipment or renovating your office before your corporation’s year-end, you can take advantage of accelerated depreciation, allowing you to deduct the full cost in the current tax year. Whether you’re upgrading to a new digital X-ray machine or renovating your waiting room, these expenses can be significant but are essential to providing top-notch patient care. The good news is they can also provide immediate tax savings. 2. Maximize your TFSA contribution Tax-Free Savings Accounts (TFSA) offer a great way to grow your savings without worrying about taxes on the earnings. The TFSA dollar limit will be $7,000 in 2025, matching the 2024 amount. That means the total contribution room available next year (2025 for someone who has never contributed to a TFSA and has been eligible to do so since its introduction in 2009) is set to be $102,000, up from $95,000 this year. If you’ve reached the maximum, you can gift money to your spouse or adult children, allowing them to grow their own tax-free savings. No one wants to pay unnecessary taxes. Keep more of your hard-earned income by planning ahead. Here are six tailored strategies for reducing your tax burden and making the most of your income: Pro Tip: Running a practice can mean fluctuating income, so having a TFSA gives you a flexible, tax-free savings cushion for both personal and professional needs. If you’re setting aside funds for future clinic upgrades or emergencies, maximizing your TFSA can help keep those savings intact. 3. Enhance your children’s education savings with an RESP As a busy professional, you may be looking for simple ways to secure your children’s future. A family Registered Education Savings Plan (RESP) helps you save for your children’s education while benefiting from government grants. The Canada Education Savings Grant (CESG) provides matching contributions up to a certain amount, but only until the calendar year your child turns 17. After that, you can still contribute, but it’s best to shift future RESP contributions to younger children to maximize grant eligibility. 4. Plan ahead for your RRIF at age 71 For those approaching retirement, remember you’ll need to convert your Registered Retirement Savings Plan (RRSP) into a Registered Retirement Income Fund (RRIF) by the end of the year you turn 71. 30 | 2024 | Issue 6
RkJQdWJsaXNoZXIy OTE5MTI=