In December, many people face a time crunch with holiday planning and end-of-year tasks. But you can reduce the stress by getting a head start on your financial to-do list. Here are some steps you can start planning now.
TFSA withdrawals. Do you plan on taking money out of a Tax-Free Savings Account (TFSA) in the near future? Make the withdrawal before 2017 ends and you can replenish your TFSA in 2018.
RESP contributions. Contribute $2,500 to a Registered Education Savings Plan (RESP) by December 31 to generate a $500 Canada Education Savings Grant (CESG) for 2017.
Trigger capital losses to reduce capital gains. You may want to consider selling non-registered investments that are showing a net capital loss that could offset taxable capital gains realized in 2017. Excess losses can be applied against gains from the previous three years or carried forward indefinitely.
Donate to charity. Make charitable donations by December 31 if you want the receipt for your 2017 tax return.
Make your final RRSP contribution. If you turn 71 in 2017, you must terminate your Registered Retirement Savings Plan (RRSP) by December 31. You have only until the end of the year to make your final contribution, not until March 1, 2018. Note, however, that contributions to a spousal RRSP can be made up until the end of the year your spouse turns 71.
Make strategic withdrawals from your RRSP or RRIF. If you have a large RRSP or Registered Retirement Income Fund (RRIF) that would be taxed at the highest rate as part of your estate, you can decrease the potential tax liability by withdrawing an amount by December 31 that raises your taxable income to the limit of your current tax bracket.
Talk to us about end-of-year financial tasks that we can start helping you with now.
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