There is no question that reducing taxes – legally – is appealing to everyone. However, in many cases this is easier said than done. The key is to understand how taxes work and how to minimize your tax responsibility. Some of the smartest investment strategies that are available to reduce a person’s taxable income in Ontario are highlighted here.

Contribute the Max Amount that is Allowed by Law to Retirement Accounts

This includes the Roth IRA, SEP-IRA, 403(b), traditional IRA and 401(k). While you do not have the ability to contribute to all of these accounts, the more that you are able to contribute to a tax advantaged account, the better it will be for you. IN order to find out all the specific about various retirement account options, visit the IRS website.

Most Workplace Accounts allow You to Kill Two Birds with One Stone

There are several benefits offered by this, including:

• The contribution to these accounts will reduce your total taxable income
• The money is not subject to any type of tax until it is withdrawn.

If you have a Roth IRA, the first contribution will not be deducted from your actual income; however, the money that is invested in the actual account will grow tax free. Also, if you withdraw the money after you reach the age of 59 ½ then the withdrawals will also be completely tax free.

Create a Health Savings Account (HAS) if Possible

This is an account designed for people who have a high deductible health plan, or HDHP. The four benefits offered by this type of account include:

• The money that is contributed is completely tax deductible
• While it is in the account the money will grow completely tax free
• The withdrawals made for any qualified medical expense are also tax free
• The contributions that are not used can remain in the account and grow completely tax deferred

Bonds can Protect Income from Local and State Taxes

If you are in a state that have higher taxes, even if you don’t, I bonds are a great and smart investment for the entire case element of your portfolio. They do not accrue any type of local or state taxes and the investments will protect the cash from any inflation.

When it comes to a high income fund in Ontario knowing how to handle the taxes associated with them is essential. The tips here will help you understand this and get the best possible results for the tax payer.

For more information about these funds and how to protect any tax earner’s money, contact Excel Funds. Here all the information that is needed can be gathered.