What Tax Planning Should I Do Before Year-End?
Key strategies to implement before December 31: harvest capital losses to offset gains, make charitable donations for tax credits, pay deductible expenses before year-end, consider income timing (deferral or acceleration), top up TFSA if you have room.
What Is Capital Loss Harvesting?
Sell investments at a loss to offset capital gains realized during the year. Net capital losses can be carried back 3 years or forward indefinitely. Be aware of the superficial loss rule: you cannot repurchase the same investment within 30 days before or after the sale.
When Should I Make RRSP Contributions?
While RRSP contributions for a tax year can be made up to 60 days after year-end (late February/early March), making contributions before December 31 gives your investments more time to grow tax-sheltered. Consider making regular contributions throughout the year.
How Can Business Owners Optimize Year-End?
For business owners: pay bonuses to family members before year-end (if reasonable for work performed), prepay deductible expenses (rent, insurance, professional dues), purchase needed equipment to claim CCA, consider salary vs. dividend mix for optimal tax treatment.