Several tax deadlines come early this year: BMO

Dec. 31 is the last day to contribute to some registered plans have

As the New Year approaches, BMO Financial Group reminded Canadians today that December 31st marks the last day to contribute to certain registered plans. It is also a key deadline for Canadians who want to take advantage of tax deductions.

Tina Di Vito, Head, BMO Retirement Institute, cautioned Canadians to act now to get their contributions and tax planning in order before December 31. Waiting until the New Year to start thinking about taxes is often too late, as many of the cut-off dates for tax deductions and credits fall at the end of the calendar year.

“With all the distractions around this time of the year, it’s easy to forget about key end-of-year personal finance deadlines. With a little bit of planning and help from a financial or tax professional, making arrangements now can make the New Year less stressful,” said Ms. Di Vito.

Tina Di Vito Reminds Canadians of the Following Year-End Deadlines:

Tax-loss Selling – Deadline: December 23

—  If you have investments that have depreciated in value, consider selling

these investments before year-end to offset capital gains realized

earlier in the year to reduce your overall tax bill. It is important to

ensure that a sale makes sense from an investment perspective, since

stocks sold at a loss cannot be repurchased until at least 30 days after

sale to be effective. Be sure to work with your BMO advisor when

implementing this strategy.

 

RDSP Contributions for Grants and Bonds – Deadline: December 31(i)

—  Designed for individuals with disabilities, the Registered Disability

Savings Plan (RDSP) combines the advantages of tax deferred investment

growth with the opportunity to receive government subsidies. December 31

is the annual contribution deadline for receiving Grants and Bonds from

the government.

—  December 31 is also the last day for Grants and Bond eligibility for

those beneficiaries who are turning 49 years of age, and is the last day

contributions are permitted to the plan for those beneficiaries who are

turning 59 years of age.

—  For more information on the RDSP, please visit:

http://www.bmo.com/home/personal/banking/investments/disability-

savings/registered-dsp

 

Charitable Donations & Other Tax Credits/Deductions – Deadline: December 31(i)

—  Ensure all charitable donations are made before December 31 in order to

receive a tax receipt for 2011.

—  Instead of donating cash to charities, investors could consider donating

appreciated publicly-traded securities. This strategy can provide a tax

credit equal to the value of the securities donated, while also

potentially eliminating the capital gains tax otherwise payable on the

gain accrued on the security.

—  December 31 is also the final payment date for a 2011 tax deduction or

credit for expenses such as childcare, medical costs, tuition and the

recently-introduced children’s fitness and arts tax credits.

 

TFSA Withdrawals – Deadline: December 31(i)

—  If you are planning a withdrawal from your Tax-Free Savings Account

(TFSA), consider making this withdrawal in December instead of waiting

until the New Year; a withdrawal would result in additional TFSA

contribution room in the following year.

—  For more information on the TFSA, please visit:

http://www.bmo.com/home/personal/banking/investments/tax-free/tfsa

 

RRSP Contributions for those turning 71 – Deadline: December 31(i)

—  Individuals who turned 71 years of age in 2011 must collapse their RRSP

by the end of the year. Such individuals should consider a final RRSP

contribution, assuming any unused contribution room exists. Seniors

and/or retirees should also take note of some of the important tax

changes in recent years (such as pension income splitting, the

amendments to the Canada Pension Plan and the introduction of the TFSA)

that may affect their tax planning.

—  For more information, please visit:

http://www.bmo.com/home/personal/banking/investments/retirement-

savings/retirement-planning/what-stage-are-you-in/my-working-years

 

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