The COVID-19 pandemic has been hard on the economy and the stock market. However, there are some smart money moves you may be able to make in our current situation that could benefit you now or later. Georgia Swan, a Tax and Estate Planner with TD Wealth, says, that while every situation is different and you should consider speaking with a professional, there are three strategies you may be able to make now that might be of benefit now or in the future.
It’s not too early to think about next year’s (that would be fiscal 2020) tax filing. Swan says that with the drop in the markets, many people will have the opportunity to report investment losses in 2020, known as tax-loss selling. This is a tax management strategy which may decrease the amount of capital gains tax owed. These losses can be carried back three years and applied to 2019’s income once you file your 2020 income tax return next year or they can be carried forward to future gains. Therefore, if one of your stocks is currently sustaining a loss, you may wish to sell it and apply the capital loss against a capital gain next year or in the future. Swan notes that everyone’s situation is different and that you should have a conversation with a tax or financial professional to see if this strategy is right for you.
Exercising your employee stock options
Employee stock options are often part of an employee’s compensation: they allow the employee to participate in the growth of the value of their company. Generally, the stock options give an employee the option to purchase shares of the company, often with the company matching contributions. The most usual circumstance would see an employee accumulate stock options, allow the shares to grow and then exercise the right to purchase them at the lower option price when the fair market value is higher.
However, Swan says that if you have stock options and the current exercise price is below fair market value, there may be a beneficial tax strategy available to you if you exercise the options now. If you exercise stock options when the fair market value of the shares are at a lower value compared to what they may have been in a good year on the market, it will help keep your income lower, which can be beneficial for tax management purposes. Secondly, since the shares are low when exercised, they will be presumably be higher when the shares are eventually sold, bringing about a higher return. Again, this is beneficial from a tax management point of view because the capital gains on the sale of the shares are taxed more favourably than income.
See whether you are eligible for relief, deductions or other tax credits
Even if you have kept your job, check out the relief programs the government is offering now and in the future as events evolve. If you have run up expenses at home due to changes at work, you may be able to claim some of the expenses of your home work space, and you may be able to qualify for some of the government emergency benefits if your hours have been cut back or if you do lose your job.
DISCLAIMER: The information contained herein has been provided by TD Wealth and is for information purposes only. The information has been drawn from sources believed to be reliable. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.
TD Wealth represents the products and services offered by TD Waterhouse Canada Inc., TD Waterhouse Private Investment Counsel Inc., TD Wealth Private Banking (offered by The Toronto-Dominion Bank) and TD Wealth Private Trust (offered by The Canada Trust Company).
All trademarks are the property of their respective owners.
® The TD logo and other trade-marks are the property of The Toronto-Dominion Bank.
MENTIONS JURIDIQUES : Les renseignements aux présentes ont été fournis par Gestion de patrimoine TD aux fins d’information seulement. Les renseignements proviennent de sources jugées fiables. Les graphiques et les tableaux sont utilisés à des fins d’illustration et ne reflètent pas des valeurs ou des rendements futurs. Ces renseignements ne fournissent pas de conseils financiers, juridiques, fiscaux ou de placement. Les stratégies fiscales, de placement ou de négociation devraient être étudiées en fonction des objectifs et de la tolérance au risque de chacun. Gestion de patrimoine TD représente les produits et services offerts par TD Waterhouse Canada Inc., Gestion privée TD Waterhouse Inc., Services bancaires privés, Gestion de patrimoine TD (offerts par La Banque Toronto-Dominion) et Services fiduciaires, Gestion de patrimoine TD (offerts par La Société Canada Trust). Toutes les marques de commerce appartiennent à leurs propriétaires respectifs.
ᴹᴰ Le logo TD et les autres marques de commerce sont la propriété de La Banque Toronto-Dominion.
免責聲明：本文內之陳述由道明財富 (TD Wealth) 提供，僅供資料說明之用。本文根據相信為可靠的資料匯編而成。圖表僅供解說之用，並不反映任何投資的未來 價值或未來回報。本文資料並不旨在提供財務、法律、稅務或投資建議，衡量個別投資、交易或稅務策略時，應考慮個別人士的目標和風險承受能力。道明財富、道明銀行 (The Toronto-Dominion Bank) 與其聯屬及相關實體對任何資料錯漏或導致的損失或傷害概不負責。道明財富是代表由道明宏達理財加拿大有限公司 (TD Waterhouse Canada Inc.)、道明宏達理財私人全權託管投資有限公司 (TD Waterhouse Private Investment Counsel Inc.) 以及透過道明銀行提供之道明財富 私人銀行 (TD Wealth Private Banking) 和透過加拿大信託公司 (The Canada Trust Company) 提供之道明財富私人信託 (TD Wealth Private Trust) 所提供的 產品與服務。TD Waterhouse Canada Inc. － Member of the Canadian Investor Protection Fund。
® 道明 (TD) 標誌和其他商標是道明銀行的產權。
免责声明：本文内之陈述由道明财富 (TD Wealth) 提供，仅供资料说明之用。本文根据相信为可靠的资料汇编而成。图表仅供解说之用，并不反映任何投资的未来 价值或未来回报。本文资料并不旨在提供财务、法律、税务或投资建议，衡量个别投资、交易或税务策略时，应考虑个别人士的目标和风险承受能力。道明财富、道明 银行 (The Toronto-Dominion Bank) 与其联属机构及相关实体对本文中任何资料错漏或导致的损失或伤害概不负责。道明财富是代表由道明宏达理财加拿大有限公司 (TD Waterhouse Canada Inc.)、道明宏达理财私人全权托管投资有限公司 (TD Waterhouse Private Investment Counsel Inc.)、以及透过道明银行提供之道明财富私人 银行 (TD Wealth Private Banking) 和透过加拿大信托公司 (The Canada Trust Company) 提供之道明财富私人信托 (TD Wealth Private Trust) 所提供的产品与 服务。TD Waterhouse Canada Inc. — Member of the Canadian Investor Protection Fund。
® 道明 (TD) 标志和其他商标是道明银行的产权。