The most efficient way to reduce taxes is to
A)use non-refundable tax credits first.
B)use refundable tax credits first.
C)transfer transferrable tax credits to the highest income earning spouse.
D)carry forward last year's unused RRSP contributions.

Question

Quizplus · Accepted Answer

Using non-refundable tax credits first will reduce the tax payable at the highest marginal rate, resulting in the greatest tax savings. Refundable tax credits are already fully refundable, so using them first will not result in any additional tax savings. Transferring transferrable tax credits or carrying forward unused RRSP contributions may also be effective tax planning strategies, but using non-refundable tax credits first is the most efficient way to reduce taxes.

The Most Efficient Way to Reduce Taxes Is to