When the end of the year rolls around, most people’s minds turn to holidays, wintersports and cocoa by the fire. Thinking about your taxes in December? That’s for Scrooges and Grinches! Don’t worry: here at Liu & Associates, we’ve put together a list of tips and checked it twice. Read on to find out how your tax return can go from naughty to nice.
Some taxpayers make use of an installment plan to spread their owed taxes across the year. In this case, final payments are due December 15 of that tax year. Missing the final payment or any previous installments can incur costly fees. Penalty interest is further payable to CRA and can impact the following tax return.
If you have had successful investments throughout the year, December 24 is the deadline to settle trades. This is important because selling off a stock that has performed poorly can help offset capital gains tax incurred by your better deals. Bear in mind that you cannot buyback within 30 days or else it is considered ‘superficial’ and the benefit is waived.
Taxpayers have until December 31 to contribute to a Registered Education Savings Plan. Qualifying returns will be eligible for the Canada Education Savings Grant and possibly other tax benefits.
If you need to offset owed taxes, year-end is the perfect time to make donations to charities, causes and non-profits. CRA is openhanded with qualifying charitable contributions– meaning a couple clicks online and one tax receipt later, you owe less than before. If you have foreign income, consult the tax code to see if you can make credit-eligible donations in the respective country.
While it may be more fun to go tobogganing and shopping, it can mean more of both next year if you get your finances in order. Following some of the guidance above can help mitigate higher taxes for individuals. Liu & Associates is here to help– contact or visit us today
for a full assessment of you or your family’s tax reality