Get Your Free Report
CALL US AT: 905 943 4046
"WE GUARANTEE OUR FIXED PRICE QUOTATIONS"



Year-End Tax Planning

Not the Tip you want to see?click here for additional tips

In Canada, there are a number of strategies that could be followed to
reduce the tax burden by legitimate means. Some strategies are long-term
and need to be put in place by a Canadian Chartered Accountant and
followed over an extended period of time. However, here are some items
that can be considered and implemented now, before the December 31
year-end is upon us:

  • Consider selling any stocks whose market value is below cost,
    if they do not have a reasonable chance of recovering their value in the
    foreseeable future. This would enable a capital loss to be deducted
    against other capital gains taken during the year, or retroactively
    against capital gains from prior years.
  • If you are considering charitable donations, better to do it in
    December rather than January or February, to get the significant tax
    credit that would result (usually 30-40% of the donations).
  • Medical expenses: if you expect to incur any significant
    medical expenses shortly, it's better to pay for these in December rather than
    January to get the tax credit this year. However, keep in mind that total
    medical expenses must exceed 3% of net income before they can be
    deducted.
  • Political contributions may be claimed for federal political
    contributions and for some provincial party contributions supported by an
    official receipt.
  • Significant tax credits for tuition fees can be claimed if paid
    in the current tax year, for a student enrolled in full or part-time studies
    at an educational institution.
  • Legal expenses are deductible when paid in the year to collect
    or establish a right to a retiring allowance, an award for wrongful
    dismissal, or a pension benefit. The legal expenses cannot exceed the
    benefit to which they relate.
  • RRSP contributions are deductible when made in the current year
    or up to 2 months after the year. The deductible amount is designated on the
    previous year's notice of assessment from the government. It is
    advantageous to contribute and deduct the full amount allowed, but is
    often not advantageous to borrow to contribute more than current cash flow
    allows, since interest on the loan is not deductible. It is important not
    to exceed the maximum allowable contribution, as there is a severe penalty
    for over-contributions unless the error is corrected shortly afterwards by
    withdrawing the over-contribution.


There are other strategies that can be implemented to reduce
you tax burden.

Please contact us at 905-943-4046 if you need further assistance or accounting services in the coming months. Click here for additional contact information

Tip of The Week | Simkover and Associates

© 2010 Simkover + Associates. All Rights Reserved
Home | Site Map | Contact Us