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Year End Financial Moves - 2014 update

on Sun, 12/14/2014 - 21:45

We have still about 2 weeks to go before 2014 leave us for good. Other than what I had written last year, I am adding a couple of moves this year :)

Make RSP withdraws

We talked about RSP meltdowns from time to time. If that's something you are considering and should your (projection) income in 2014 is lower (relatively) than your previous years, you might want to consider withdrawing a portion of your RSP before the year ends. Note that even if you have done a wrong calculation, you can still do extra RSP contribution within first 60 days in 2013 to make up the error, so by all means, do something.

Enroll your kids

Remember the children's fitness and art tax credits? If you have forgotten about that during the year of 2014, Christmas and year-end programs are your last chance! Enroll your kids before the year ends (tax credits based on amount being paid in 2014, classes not neccessaily needed to be held in 2014).

Reallocate your Canadian assets

If you are considered as a U.S. person, you might want to make sure you reallocate your assets and let go of your Canadian assets to aviod non-necessary tax due. Since IRS are forcing FIs to file their clients' info, starting July 2014 (theyexempt FIs not to provide info to CRA to IRS but that doesn't help the individuals, you as a U.S. citizen is still obligate to report to the IRS).

Make changes to account registrations

Depending on how you file your income tax and how some FIs issue their T-slips, you might want to switch your names around under a joint account. Example: if you hold an investment with your children, put the person who has a lower tax bracket as the main account holder because some FIs' T-slips only show the main account holder's name instead of both names. Then the extra income from that joint account can be claimed under the lower income person's name.

Direct deposit request

CRA (as well as a whole list of Canadian governmental bodies) is phasing out to send cheques to us to cut cost. Since it takes time for them to get things changed, making the request to CRA before the tax season kicks in might be a good idea.

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