No one wants to miss out on savings. Ensure your clients know about important tax-saving deadlines coming up this weekend. And check out these other useful tax tips from BMO Nesbitt Burns.
Read: 8 great year-end tax tips
1. Payment of quarterly tax installments
Deadline: Dec. 15*
Individuals whose estimated income tax payable for the year, or payable for either of the two preceding years, exceeds $3,000 ($1,800 for Quebec residents) may be required to pay income tax installments. Personal tax installments are due four times a year, with the final installment due December 15.
Read: Don’t delay planning
Deadline: Dec. 24
If your client has investments that have depreciated in value, she should consider selling these investments before year-end to offset capital gains realized earlier in the year. This move reduces her overall tax bill. It is important to ensure that a sale makes sense from an investment perspective, since stocks sold at a loss cannot be repurchased until at least 31 days after sale to be effective.
Read: How to tax-loss harvest
3. Charitable donations & other tax credits or deductions
Deadline: Dec. 31
- Ensure all charitable donations are made before the end of the year in order to receive a tax receipt for 2013.
- Instead of donating cash to charities, clients should consider donating appreciated publicly-traded securities. This provides a tax credit and could potentially eliminate any capital gains tax on the accrued gain on the security.
- Dec. 31 is also the final payment date for a 2013 tax deduction or credit for expenses such as childcare, medical, tuition and the recently-introduced children’s fitness and arts tax credits.
Read: Tax tips for giving to charity
Deadline: Dec. 31
If your client is planning a withdrawal from her TFSA, consider making this withdrawal in December instead of waiting until the New Year; a withdrawal would result in additional TFSA contribution room for the following year.
Read: Faceoff: TFSA vs RRSP
5. RRSP Contributions for those turning 71
Deadline: Dec. 31
Individuals who turned 71 years of age in 2013 must collapse their RRSP by the end of the year. Such individuals should consider a final RRSP contribution, assuming any unused contribution room exists.
Read: Reliable retirement income streams
* When a due date falls on a Saturday, a Sunday, or a holiday recognized by the CRA, payment will be considered on time if received the next business day.