Five Financial Tips for Year-End

The holiday season is almost here.  But while you’re planning the celebrations with your family and friends, spend some time planning your finances.  It’s now, in the closing weeks of the year, when a few simple choices can help you get more out of your investments and pay less tax next spring.  

1. Make charitable donations and other payments.

Charitable donations must be made by December 31^st to qualify for a tax credit this year.  Medical expenses, investment management, political contributions, and support and child-care payments are just a few of the amounts generally eligible for a tax deduction or credit if paid before year-end.

2. Take advantage of tax loss selling

Consider selling disappointing investments to generate tax losses.  Those losses can be applied against any capital gains you have to reduce tax, first in the current year, and then in any of the previous three years.  If you don’t have capital gains to report now, you can carry forward capital losses indefinitely and offset tax in future years.

3. Contribute to your TFSA and RRSP

The earlier in the year you contribute to a TFSA the sooner your tax-sheltered savings can grow.  If you haven’t maximized your contributions, add to your TFSA before year-end and make next year’s contribution in January.

Have you topped up your RRSP lately?  There’s no reason to wait until next March’s deadline.  Contribute now and put your money to work.  Remember, if you’re turning 71 this year you must collapse your RRSP by the end of December.  Look at converting your plan to a tax-advantaged RRIF or annuity.  But before you do, make a final RRSP contribution and enjoy a tax deduction.

4. Maximize your RESP grants

Put $2,500 per beneficiary into an RESP each year to receive the $500 maximum Canada Education Savings Grant (up to a lifetime limit of $7, 200).  Depending on your income level and where you live, you may be eligible for additional grant money.

5. Delay tapping the Home Buyers’ Plan

If you’re planning a home purchase using the Home Buyers’ Plan, delay your RRSP withdrawal until the New Year.  You’ll have an additional year before repayments must begin.

It’s always wise to consult with a qualified financial advisor or tax professional to take full advantage of these and other year-end planning opportunities.  Contact your Weyburn Credit Union representative to learn more.