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Year-end financial moves

on Mon, 12/16/2013 - 12:33

I was actually trying to avoid this topic for the longest time, since there are already so many of them out there, I thought my readers would have more than enough information needed regarding what they need to do by the year-end to make sure they get what they need for the 2013 calendar year...

Turns out, still lots of people seems not too sure what is needed and why they need to take these deadlines seriously. Remember, CRA only looks at the date, they won't forgive you simply because you were "not aware" it should be done before the year-end.

So, while we are entering the last 2 weeks of Dec with less than 10 days of business days, here we go (actually, not too many things here):

Make certain kind of payments:
investment-related expenses, investment counseling fees for non-RRSP accounts, safety deposit box rental fees, child-care expenses, medical expenses, interest on student loans and spousal support payments have to be done by year end to be claimed this year.

Make contributions to certain types of accounts:
RESP and RDSP contributions are counted by calendar year, make sure your financial institutions credit your contribution in time to receive current year's grant;
if your child or grandchild turned 15 this year and has never has any RESP, this is your last chance to contribute at least $2,000 to collect the 20% CESG and create his/her CESG eligibility for the next 2 years;
last chance to contribute to your RRSP before converting your RRSP to an RRIF or annuity for those turning 71 in 2013 (you might be able to increase your OAS payments by doing that)

Plan withdrawals if needed:
Withdraw money from your TFSA before the year-end for short term need (extra cash for Christmas), not only to save interest cost by not using a credit card, but also to create extra room on your TFSA for 2014

Make donations:
This year, we have a new super donation credit for people who had not donated in the previous 5 years before.Budget 2013 - First-Time Donor's Super Credit

How much do you save? If you donate $1000 cash to qualifying charity (cash only), your cost can be as low as $256 after the application of the tax credit! That's quite a saving! The saved $744 can be used for other things easily, right?

Realize capital loss:
I know, most advisors tell you to sell your losing shares to realize your capital loss for the year... but hey, I'd say, only sell the ones that are really have no hopes... alternatively, you can do in kind transfer from your non-registered accounts to your RRSP or TFSA, which will still give you the capital loss without actual selling. Fulfilling your RRSP/TFSA contributing need at the same time, killing two birds with one stone. :D

Let me know if you think there are more we can do by year-end and happy financial planning!

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