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www.insideHALTON.com | OAKVILLE BEAVER | Thursday, August 11, 2016 | 16 T Making your investment portfolio more profitable with tax planning ax management is something all investors should practice. After reading this article, decide if you are paying too much income tax on your investment earnings. The No. 1 goal of investing is to focus on your after-tax return. For example, if your return on investment is ve per cent, that is just the beginning. If you pay one per cent in income taxes then your after-tax return is four per cent. It is important to focus on your after-tax return. Failing to do this is a very common mistake most investors make. Dollars & Sense Guest Contributor Peter Watson Tax-planning is a conversation you should have with your investment adviser or accountant. Advice given in this column is general and might not speci cally apply to everyone. A starting point is to make optimal use of the tax deferral accounts. These accounts, like an RRSP , RESP or RRIF , defer any income tax liability until funds are withdrawn from your account. If you make RRSP contributions during the early years of your career, any income tax liability based on investment income is deferred until funds are withdrawn, which could be decades away during your retirement. You will still pay income tax, however, you will have the bene t of delaying that in- come tax payment for several decades. The delay in paying taxes allows you to use that money to invest for your bene t. Consider this an interest-free loan from the government that allows that money to work for you to make more money. A second option is to use a tax-exempt account where any income tax that would ordinarily be paid on an investment, is not paid. Not paid now and not paid when funds are withdrawn from the account. The Tax-Free Savings Account (TFSA) is a tax exempt account. Paying no taxes on see Better on p.18 since 1993 SIT BACK AND RELAX August 2Custom Built August 19 Exquisite Furniture LET US DO THE WORK! ANCASTER MORRISTON 1242 Garner Road W. Unit 5 L9G 3K9 905.648.6888 www.penwoodfurniture.com 34 Queen St, ON 519.837.3555 N0B 2C0 August 2 - August 18 info@penwoodfurniture.com