If you’re looking for a way to reduce the amount of income tax you pay, there are some kinds of investments you may want to look at. Here are a few examples of these.
Investments that give tax advantages aren’t anything new, nor are they a secret that is only accessible to the ultra wealthy who hire an entire accounting department with the goal of finding tax loopholes. Even those who don’t have any investments know that an RRSP can help people lower their taxes as contributions up to a certain limit are tax deductible. Thanks to increased advertising by financial institutions, Tax Free Savings Accounts, or TFSA’s are also becoming more widely known among ordinary citizens, as they’re exempt from taxes on the growth realized in this kind of account.
But what about investments in corporate stocks, especially those of Canadian mining companies? A lot of investors that are seeking growth for their money are looking at stocks of companies that operate in the mining or energy production industries in Canada. What many of these investors don’t know is that some of these companies issue flow through shares, which allow mining corporations to share some of their expenditures with investors, in exchange for allowing some of their tax credits to “flow through” to shareholders.
There are certain rules and regulations regarding how much can be deducted from an investment in flow through shares. Potential investors are encouraged to consult with a financial advisor to see if the purchase of these shares would be a good fit for their portfolio, tolerance for risk as well as their general investment goals, either short term or long term.
It should be noted that these shares are issued by different companies operating in different sectors of the mining and energy industries of Canada. Therefore, the potential returns as well as the risks involved will vary from one stock to another. This is why investors are encouraged to use the services of a financial advisor who is experienced with investments in the Canadian stock market and more specifically mining and natural energy stocks.
In addition to providing advice on stock investments, the advisor can also provide help with general wealth management services, such as other investments that may or may not have tax benefits to an individual, various banking products such as checking and savings accounts, as well as credit products.
Investing in flow through shares or the Canadian energy and mining industry may not be suitable for everybody, but for investors that can find such shares which would be in line with their general objectives, tolerance for risk as well as tax reduction strategies may find in them a good investment opportunity that has the potential for growth as part of a properly diversified stock portfolio.