1. Jump on board the RRSP tax-saving train.
Contributing to an RRSP is one surefire way of reducing your annual tax bill. Say your marginal tax rate is 40 per cent and you have $10,000 in savings and sufficient RRSP contribution room. Putting that money into your RRSP makes it fully deductible from income. Your tax bill will drop by up to $4000 (40 per cent of $10,000). Plus there's another major tax benefit: Every dollar of investment income that you earn inside your RRSP avoids tax as long as it stays in the plan.

2. Arrange investments to be tax-smart.
If you invest both inside and outside an RRSP, you can arrange your portfolio to reduce tax. The key is in how different income is taxed.
Dividends and capital gains usually receive preferential tax treatment, while interest income does not. But this preferential tax treatment doesn't apply to earnings in an RRSP. It generally makes sense to hold interest-bearing investments inside your RRSP, where they will be fully sheltered, and investments that produce dividends and capital gains outside your RRSP so you can benefit from the preferential tax treatment they receive. Note that this is a general rule. Your overall investment mix, goals and time horizon will affect your decision as to which assets should be held in your RRSP.

3. Consider income-splitting with your spouse.
You can reduce your tax bill significantly by implementing income-splitting strategies if your spouse is in a lower income bracket. Here are three strategies worth considering:
Spousal RRSP. If you are the main breadwinner in your family, you'll eventually generate most of the retirement income-which may be taxed at high rates. By setting up a Spousal RRSP, you can transfer a portion of that income into your spouse's hands to be taxed at lower rates when it's withdrawn by your spouse. Talk to your Investors Group Consultant on how to implement this strategy based on your personal circumstances.
Who pays, who invests. Have the higher income spouse pay all household expenses, while the lower-income spouse uses his or her earnings for investment purposes. The investment income will be taxed at the lower-income spouse's rate.
A gift or a loan. Give or lend your spouse cash if he or she is in a lower tax bracket. The earnings on the original gift will be taxed to you, but the interest earned on the earnings will be taxed in your spouse's hands.

4. Beef up your spouse's earned income.
If you run your own business, hire your spouse as an employee. As long as the salary paid for the services performed is reasonable, it will be taxed in your spouse's hands and you will get the deduction.

5. Retirement has its tax benefits.
If you are retired, be sure to take advantage of the following:

Splitting CPP/QPP benefits. This easy to implement strategy results in quick tax savings. If your spouse's marginal tax rate is lower than yours, consider splitting your CPP or QPP benefits equally between you and your spouse.
Pension Income Tax Credit. One retired spouse may be unable to claim the tax credit available on up to $1,000 of pension income because he or she has no:
RRSP or pension income. However, interest income from an annuity may qualify for this credit if you are 65 or older. If your income is too low to take advantage of the pension credit, it can be transferred to your spouse who can use it to reduce his or her taxes, or vice-versa if your spouse is also 65 or older.

6. Split income with your children.
By transferring some of your taxable income to your children, who earn little or no taxable income, you can shrink the family tax bill. The attribution rules limit income-splitting with children under 18. If you give investments to a young daughter, for example, all interest and dividends on the original gift will be attributed back to you and taxed in your hands. But this doesn't apply to capital gains, nor to income earned on income. Keep in mind that the attribution rules usually do not apply to children 18 or older.
If you run your own business, you can also pay your children a reasonable salary for work performed. These wages will be taxed in the child's hands.

7. Consider an RESP.
While contributions to a Registered Retirement Savings Plan (RESP) aren't deductible, the investment earnings accumulate on a tax-deferred basis. In addition, the government will pay a Canada Education Savings Grant (CESG) into the RESP subject to certain conditions.
When your child starts post-secondary school, your contributions can be withdrawn from the RESP, tax-free. The RESP investment earnings and CESG grants will be taxed in the hands of your child. For more information on RESPs, contact a qualified Financial Consultant.

8. Consider 'freezing' your estate.
Estate freezes are designed to redirect future growth in the value of an asset, plus the accompanying tax liability, to others. Selling or giving the assets to your children is the simplest type of freeze. They now own it and will pay tax on future increases in values. If the asset you give to your child is a capital asset, you will be faced with a disposition for tax purposes, and possibly a significant tax bill. The attribution rules also may come into play. In addition, new rules for trusts have introduced complications into trust tax planning. Quality advice is essential when you are considering any type of estate planning, particularly estate freezes.

9. Defer tax with life insurance.
Permanent life insurance products, such as Whole and Universal Life usually have an investment component. Typically, the tax on an earnings is deferred until there is a payout. Discuss with a qualified Financial Consultant. how life insurance can be integrated into your retirement plan.

10. Reduce withholdings from pay.
You can ask the Canada Customs and Revenue Agency to allow your employer to reduce withholdings if you have contributed to an RRSP early in the year, made large charitable donations, or incurred substantial medical expenses.
Child care expenses, alimony and taxable child support also may lower your income and reduce your withholding taxes.