As I was flipping through the calendar this month, I realized that we are now past the point in the year known as Tax Freedom Day. What this essentially means, is that if all of your taxes for the whole year had to be paid up front, every dollar that was earned from January 1 until this day would have gone completely to the Canadian government, by way of taxes. In 2019, this day fell on June 14th.
While just thinking about this concept may start boiling your blood, as it does for many people, there is good news. There are ways to reduce your taxes and celebrate tax freedom much earlier than June.
Henry, one of my long-term clients, is a great example of this. Taxes were always a headache for him because he usually paid too much, simply because he didn’t understand how the tax system worked and he didn’t know
to utilize tax relief strategies. A quick chat one day revealed his tax frustrations and we set off together on a path to see what could be done to improve his tax situation.
Just a few short weeks later and with some slight changes to his finances, Henry was well on his way to paying fewer taxes than ever before. His tax freedom day was accelerated and he kept more of his own money than ever before.
And this isn’t an isolated case. In fact, tax planning is one of the major benefits that many people discover is available to them when they take a few minutes out of their day to connect with CleveDoesMore.
While paying taxes will most certainly be a part of your life for many years to come, knowing that you are reducing your tax obligation as much as possible, and understanding the various ways to lower your tax burden will most certainly allow you to celebrate Tax Freedom Day before most Canadians.
Interesting Facts about Tax Freedom Day
The exact timing of Tax Freedom Day will vary from year to year and can differ between provinces as well. This is due to different government tax policy changes and earnings sources and levels. This can be rather complicated but to give some basic insights, here are some facts to consider this year:
- In 2019, the average Canadian family will earn $117,731 in income and pay an estimated $52,675 in total taxes (44.7%).
- Tax Freedom Day in 2019 is one day earlier than in 2018
- Tax Freedom Day differ by province: The earliest provincial Tax Freedom Day falls on May 27 in Alberta, while the latest falls on July 2 in Newfoundland & Labrador. Ontario actually falls on June 10th
- Even with almost 1/2 of our incomes contributing to taxes, the government still running a deficit. Tax Freedom Day would fall on June 22nd (8 days later than June 14th) if all Government was to balance their budget by increasing taxes.
- Most Canadians are unaware of how the government spends their tax dollars.
Remember our friend Henry?
All he needed to make a big financial difference was a strategy for his taxes. By utilizing the CleveDoesMore three dimensional approach, Henry’s Tax Freedom Day essentially moved to May, putting several more weeks of salary into his home and family. We worked with him to evaluate missed opportunities, deduct any missed credits, defer taxes to future years where possible and to share income in a smart and strategic way. On a more long term basis we are also working with Henry to convert him from a full time employee position to a consultant so he can enjoy more write-offs.
Our 3D Tax Strategy is simple, and will work for everyone!
Whether you are like Henry or one of the many other people whose financial lives and Tax Freedom Days we have had the privilege to impact over the years, we can’t wait to hear your story, and help you get started on your own 3D Tax Strategy.
At CleveDoesMore, we are so confident in our ability to help you save money on your taxes that if we can’t find you an extra $500 of your own money during the review process, the entire review will be our free gift to you.