Tax Pre-Planning

So we have a bit of tax planning to do - how much fun!

G works for the RCMP, who - many years ago - voted in favour to unionize.Years after that after the union reps were chosen, they started negotiating. Many months after that, the union members were presented with the contract, and asked to vote. Many months after that vote passed, the members are now seeing 5 years of retro pay on their paycheques. 5 years of raises… split between a few pay cheques… yeah… haha (Disclaimer: not an official timeline but this did all started in 2015).

G has received a little under $19,000.00 in retro payments so far - but that is not what is hitting our bank account of course. This is going to put him into a unique tax situation for 2022. His income is going to be inflated so we were brain storming a few ways to help and came up with three main no brainer solutions:

1. RRSP deposit - Didn’t see that one coming, did you? Still trying to figure out the exact amount, but we are lucky we can monitor this into next year (2023) before the RRSP deadline. We did complete an RRSP purchase of $5,000.00 which will help to get us started and then we can start fine tuning it closer to year end.

2. Banking of overtime - This was G’s idea and I think it’s a really good option! He has the ability to bank any overtime he works. This can either be used for time off or he can request for these amounts to get paid out at a later time. This is nice flexibility either way.

3. Charitable donations - This was already a goal of ours for 2022 but it will help in reducing G’s taxable income. I have this worked into our budget monthly and try to choose a new local/Saskatchewan based organization to support (but also researching some International organizations given certain world events currently unfolding…) 

The RRSP is going to be our biggest focus - our normal pre-authorized contributions are $100.00 biweekly, which is still going to be on autopilot. Once we have all our slips for this year I’ll see if we can get away with delaying the RRSP contributions from 2021, to use them for 2022 instead. But I’ll play around with the tax software once we have all the information available!

- M