Thank you for replying to our Quiz to reduce your income taxes.
Here's your rating and analysis based on the answers you gave to our online quiz. It looks like you have some fantastic opportunities to reduce your taxes!
Question :
Your Answer:
explain here
Question 1:
Do you take advantage of the great tax deduction the government allows you to use each year? Your Answer:
I don't know what it is.
In the U.S. and in Canada, your federal tax department allows you to make contributions to your own personal retirement plan. In the U.S. it is called and IRA (Income Retirment Annuity) and in Canada it is called an RRSP (Registered Retirment Savings Plan). The amount of dollars you can put into your plan is regulated by a percentage of your Earned Income. The amount you contribute to your plan reduces your taxable income by that much and depending on the tax bracket you're in this could be a saving of 30% - 40% - maybe even 50% or more according to your marginal tax rate.
This is a tremendous saving and for example could save you as much as $5,000 on a 10,000 contribution. So now you have $10,000 growing and accumulating for your benefit that really only cost you $5,000 because of the $5,000 of tax you saved. What are you waiting for?
Question 1:
Do you take advantage of the great tax deduction the government allows you to use each year? Your Answer:
I am somewhat familiar with some tax deductions
I can take each year.
I'm glad that you have some understanding of available tax deductions you can use each year. My question is... are you using them? And are you using them to full advantage? There are many different approaches you can take to saving your tax dollars and I'll be glad to share them with you through our newsletter.
Question 1:
Do you take advantage of the great tax deduction the government allows you to use each year?
Your Answer:
I have no idea of what you're talking about.
I'm sorry to hear that you don't know about the steps you can take to reduce your taxes. This means that for years you have paid the Government far more tax than you needed to. This can be changed right away by following some very easy steps you can take to change your tax position. I will send you more information and tips in our FREE newsletter. Many of these strategies can be used right away... BUT be sure to check with your tax accountant to see if they are OK to use in your jurisdiction.
Question 1:
Do you take advantage of the great tax deduction the government allows you to use each year? Your Answer:
I really have no interest in saving any tax dollars.
Do you really mean that? My question to you is "Why do you want to pay more than your fair share of taxes to the Government? Could you put your money to better use for you than what the Government provides to you?"
I will send you some FREE information, in our newsletter, on some steps you can take to put more money in YOUR pocket. Once you have had a chance to find out what you can do ( check with your tax accountant if OK to use in your jurisdiction) then you have the bullets you can decide to use or not.
Question 2:
Do you know how to reduce the tax deducted off
each paycheque throughout the year? Your Answer:
I didn't know you could.
When you are contributing to an IRA (US) or RRSP (Canada) you can deduct those contributions from your current taxable income. The trouble with the way most people do this is, the tax break comes just once a year when you do your taxes. Why not contribute monthly to your IRA or RRSP and then get the tax break every time you receive a paycheque? Simply contact the nice people at the District Taxation Office of the IRS or CCRA (Canada) and ask for a Source Deduction form which you fill out and present to your employer who then reduces the taxes withheld from your pay.
Now you have more disposable income every month for investing or to pay bills, etc.
Question 2:
Do you know how to reduce the tax deducted off
each paycheque throughout the year? Your Answer:
I consider this a very important question.
When you are contributing to an IRA (US) or RRSP (Canada) you can deduct those contributions from your current taxable income. The trouble with the way most people do this is, the tax break comes just once a year when you do your taxes. Why not contribute monthly to your IRA or RRSP and then get the tax break every time you receive a paycheque? Simply contact the nice people at the District Taxation Office of the IRS or CCRA (Canada) and ask for a Source Deduction form which you fill out and present to your employer who then reduces the taxes withheld from your pay.
Now you have more disposable income every month for investing or to pay bills, etc.
Question 2:
Do you know how to reduce the tax deducted off
each paycheque throughout the year? Your Answer:
Somewhat Important
Your response says you feel this is somewhat important to you. Let me ask you "Would extra money in your pocket every month be important?"
When you are contributing to an IRA (US) or RRSP (Canada) you can deduct those contributions from your current taxable income. The trouble with the way most people do this is, the tax break comes just once a year when you do your taxes. Why not contribute monthly to your IRA or RRSP and then get the tax break every time you receive a paycheque? Simply contact the nice people at the District Taxation Office of the IRS or CCRA (Canada) and ask for a Source Deduction form which you fill out and present to your employer who then reduces the taxes withheld from your pay.
Now you have more disposable income every month for investing or to pay bills, etc.
Question 2:
Do you know how to reduce the tax deducted off
each paycheque throughout the year? Your Answer:
Not Important
Your response says you feel this is not important to you. Let me ask you "Would extra money in your pocket every month be important?"
When you are contributing to an IRA (US) or RRSP (Canada) you can deduct those contributions from your current taxable income. The trouble with the way most people do this is, the tax break comes just once a year when you do your taxes. Why not contribute monthly to your IRA or RRSP and then get the tax break every time you receive a paycheque? Simply contact the nice people at the District Taxation Office of the IRS or CCRA (Canada) and ask for a Source Deduction form which you fill out and present to your employer who then reduces the taxes withheld from your pay.
Now you have more disposable income every month for investing or to pay bills, etc.
Question 3:
Do you have the right kind of investments to reduce the income tax you pay? Your Answer:
I didn't know there was different tax rates
on different investments.
Yes, there certainly is. For instance, interest income earned on your investments is added to your regular income and you pay your "marginal tax rate" on that kind of income. If you have investments that pay you dividends (not interest) then you get a tax break on that kind of income. The third type of income is "capital gains" on your investments, which again receives another kind of preferential tax treatment. To get a better understanding of these different tax structures you should talk to a tax accountant. I will share more information on this and other tips in upcoming articles in our FREE newsletter that I'll be sending to you.
Question 3:
Do you have the right kind of investments to reduce the income tax you pay? Your Answer:
What do you mean the right kind of investment?
If you have investments that return different types of income then you have opened the door to different tax rates on that income.
For instance, interest income earned on your investments is added to your regular income and you pay your "marginal tax rate" on that kind of income. If you have investments that pay you dividends (not interest) then you get a tax break on that kind of income. The third type of income is "capital gains" on your investments, which again receives another kind of preferential tax treatment. To get a better understanding of these different tax structures you should talk to a tax accountant. I will share more information on this and other tips in upcoming articles in our FREE newsletter that I'll be sending to you.
Question 3:
Do you have the right kind of investments to reduce the income tax you pay? Your Answer:
I am familiar with different tax rates on different
kinds of investments.
It's good that you are aware of the different strategies you can use to receive preferential tax treatment on your invetments. For instance, interest income earned on your investments is added to your regular income and you pay your "marginal tax rate" on that kind of income. If you have investments that pay you dividends (not interest) then you get a tax break on that kind of income. The third type of income is "capital gains" on your investments, which again receives another kind of preferential tax treatment. I hope you are using your knowledge to full advantage on these different forms of investment. To get a better understanding of these different tax structures you should talk to a tax accountant as well. I'll share more information on this and other tips in upcoming articles in our FREE newsletter that I'll be sending to you.
Question 3:
Do you have the right kind of investments to reduce the income tax you pay? Your Answer:
I don't have any investments.
I know it's not always easy to earmark your hard earned money for investments for your future...But without earmarking some of your earnings for investments, you will be assigned to working to your retirment age and will then have to rely on the government penisons for your income at that time.
See if you can put aside 5% to 10% of your earnings each month to put into investments for your future. You should take the time to learn about investments to make sure you are getting the "biggest bang" for your buck and talk to an investment advisor or your tax accountant to learn more.
For instance, if you earn interest income on your investments, the interest is added to your regular income and you pay your "marginal tax rate" on that kind of income (you can do better than this).
If you have investments that pay you dividends (not interest) then you get a tax break on that kind of income (better).
The third type of income is "capital gains" on your investments, which again receives another kind of preferential tax treatment (best).
I hope you will use your knowledge to full advantage on these different forms of investment. To get a better understanding of these different tax structures you should talk to a tax accountant as well. I'll share more information on this and other tips in upcoming articles in our FREE newsletter that I'll be sending to you
Question 4:
Are you building a "tax-free" investment?
Your Answer:
I didn't know you could get a tax-free investment.
You can create a tax-free pension for yourself! It's possible using a product called Universal Life and a nice loophole in the Income Tax Act. You're allowed to over contribute to a Universal Life Policy and the excess will accumulate tax-free, just like in your IRA or RRSP. When you retire, you can use this money as collateral at the bank to receive income form a borowing against that collateral. That income stream is tax-free for life because it flow from the proceeds of a life insurance product. The bank is protected on their loan to you as they take an assignment on your insurance policy to pay off the loan at your demise and the balance (if any) goes to your named beneficiaries.
For more clarification on this strategy you should talk to your accountant and also discuss this with your trusted life insurance agent.
This strategy is good in Canada but if you are in the US or some other country, you should check if this is OK in your tax jurisdiction.
Question 4:
Are you building a "tax-free" investment? Your Answer:
I don't think you can get a tax-free investment.
This is a perfectly legitimate strategy in Canada, however if you live elsewhere then you should check with your tax accountant and your life insurance agent to confirm before embarking on the following strategy.
You can create a tax-free pension for yourself!
It's possible using a product called Universal Life and a nice loophole in the Income Tax Act. You're allowed to over contribute to a Universal Life Policy and the excess will accumulate tax-free, just like in your IRA or RRSP. When you retire, you can use this money as collateral at the bank to receive income form a borowing against that collateral.
That income stream is tax-free for life because it flow from the proceeds of a life insurance product. The bank is protected on their loan to you as they take an assignment on your insurance policy to pay off the loan at your demise and the balance (if any) goes to your named beneficiaries.
For more clarification on this strategy you should talk to your accountant and also discuss this with your trusted life insurance agent.
This strategy is good in Canada but if you are in the US or some other country, you should check if this is OK in your tax jurisdiction.
Question 4:
Are you building a "tax-free" investment? Your Answer:
If I can do this, I would consider it important
This is a perfectly legitimate strategy in Canada, however if you live elsewhere then you should check with your tax accountant and your life insurance agent to confirm before embarking on the following strategy.
You can create a tax-free pension for yourself!
It's possible using a product called Universal Life and a nice loophole in the Income Tax Act. You're allowed to over contribute to a Universal Life Policy and the excess will accumulate tax-free, just like in your IRA or RRSP. When you retire, you can use this money as collateral at the bank to receive income form a borowing against that collateral.
That income stream is tax-free for life because it flows from the proceeds of a life insurance product. The bank is protected on their loan to you as they take an assignment on your insurance policy to pay off the loan at your demise and the balance (if any) goes to your named beneficiaries.
For more clarification on this strategy you should talk to your accountant and also discuss this with your trusted life insurance agent.
This strategy is good in Canada but if you are in the US or some other country, you should check if this is OK in your tax jurisdiction.
Question 4:
Are you building a "tax-free" investment? Your Answer:
I don't think it's important.
Your response says you feel this is not important to you. Let me ask you "Will you be happy to live on only a government pension when you retire?" This strategy is only one of many you could use to help you live the life you would like in your retirement years.
This is a perfectly legitimate strategy in Canada, however if you live elsewhere then you should check with your tax accountant and your life insurance agent to confirm before embarking on the following strategy.
You can create a tax-free pension for yourself!
It's possible using a product called Universal Life and a nice loophole in the Income Tax Act. You're allowed to over contribute to a Universal Life Policy and the excess will accumulate tax-free, just like in your IRA or RRSP. When you retire, you can use this money as collateral at the bank to receive income form a borowing against that collateral.
That income stream is tax-free for life because it flow from the proceeds of a life insurance product. The bank is protected on their loan to you as they take an assignment on your insurance policy to pay off the loan at your demise and the balance (if any) goes to your named beneficiaries.
For more clarification on this strategy you should talk to your accountant and also discuss this with your trusted life insurance agent.
This strategy is good in Canada but if you are in the US or some other country, you should check if this is OK in your tax jurisdiction.
Question 5:
Do you know how to cut the tax in half
on your investments? Your Answer:
I didn't know that was possible.
Earn income in the form of capital gains. This is absolutely the best possible taxed money that you can pocket. A capital gain is what you earn when an investment rises in value. It could be a stock, mutual fund or a piece of commercial real estate or even a residential home you bought for the purpose of fixing up and reselling (not living in it). Money made from money that you lend to earn interest on is NOT considered a capital gain.
In Canada (as of the year 2000), you only include half of the capital gain in your income, which means half of the gain is tax-free and the maximum tax you will pay on the other half is 25%. So of every $1000 you make in capital gains today, you get to keep $750.
If you don't live in Canada, then please check with your tax accountant to see what the rules are governing capital gains in your tax jurisdiction.
Isn't this a great investment strategy to have in your portfolio?
Question 5:
Do you know how to cut the tax in half
on your investments? Your Answer:
I consider this very important.
Excellent! I'm glad you see the importance of this and I hope the following makes good sense to you and is something you can use in your tax jurisdiction.
Earn income in the form of capital gains.
This is absolutely the best possible taxed money that you can pocket. A capital gain is what you earn when an investment rises in value. It could be a stock, mutual fund or a piece of commercial real estate or even a residential home you bought for the purpose of fixing up and reselling (not living in it).
Money made from money that you lend to earn interest on is NOT considered a capital gain.
In Canada (as of the year 2000), you only include half of the capital gain in your income, which means half of the gain is tax-free and the maximum tax you will pay on the other half is 25%. So of every $1000 you make in capital gains today, you get to keep $750.
If you don't live in Canada, then please check with your tax accountant to see what the rules are governing capital gains in your tax jurisdiction.
Isn't this a great investment strategy to have in your portfolio?
Question 5:
Do you know how to cut the tax in half
on your investments?
Your Answer:
I consider this somewhat important.
I hope the following makes good sense, is something you can use in your tax jurisdiction and you see that it can be very important to you.
Earn income in the form of capital gains.
This is absolutely the best possible taxed money that you can pocket. A capital gain is what you earn when an investment rises in value. It could be a stock, mutual fund or a piece of commercial real estate or even a residential home you bought for the purpose of fixing up and reselling (not living in it).
Money made from money that you lend to earn interest on is NOT considered a capital gain.
In Canada (as of the year 2000), you only include half of the capital gain in your income, which means half of the gain is tax-free and the maximum tax you will pay on the other half is 25%. So of every $1000 you make in capital gains today, you get to keep $750.
If you don't live in Canada, then please check with your tax accountant to see what the rules are governing capital gains in your tax jurisdiction.
Isn't this a great investment strategy to have in your portfolio?
Question 5:
Do you know how to cut the tax in half
on your investments? Your Answer:
Not Important to me.
I'm sorry to hear that you don't feel it's important to use the steps you can to reduce your taxes. This means that for years you have paid the Government far more tax than you needed to. This can be changed right away by following some very easy steps you can take to change your tax position. I will send you more information and tips in our FREE newsletter. This strategy can be used right away... BUT be sure to check with your tax accountant to see if it's OK to use in your tax jurisdiction.
I hope the following makes good sense, is something you can use in your tax jurisdiction and you see that it can be very important to you.
Earn income in the form of capital gains.
This is absolutely the best possible taxed money that you can pocket. A capital gain is what you earn when an investment rises in value. It could be a stock, mutual fund or a piece of commercial real estate or even a residential home you bought for the purpose of fixing up and reselling (not living in it).
Money made from money that you lend to earn interest on is NOT considered a capital gain.
In Canada (as of the year 2000), you only include half of the capital gain in your income, which means half of the gain is tax-free and the maximum tax you will pay on the other half is 25%. So of every $1000 you make in capital gains today, you get to keep $750.
If you don't live in Canada, then please check with your tax accountant to see what the rules are governing capital gains in your tax jurisdiction.
Isn't this a great investment strategy to have in your portfolio?
| In a few days I'll send you more information, some timely tips, and other articles that will help you on your journey to reduce your taxes… and hopefully create a clearer vision for your financial future. |
I'll talk to you again soon!
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