Published November 1, 2024 • 7 Min Read
TLDR
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It may not be top of mind right now, but year-end tax planning is important in ensuring a smooth tax season
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By staying on top of key deadlines, can help you make the most of your tax deductions
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From making charitable donations to maximizing your health benefits, here are the key tax-planning due dates you should be aware of
As 2024 winds down and your calendar fills up with holiday activities, it’s easy for tax prep to fall off your radar.
Taking some time to review your financial affairs may provide you with opportunities to reduce your 2024 tax bill. To ensure you leave no stone unturned, here’s a summary of some common money-saving strategies and key dates you may need for tax season. Consult with your tax advisor to determine whether these, or any other strategies, are right for you.
On or Before December 15
Pay your final tax installment
If you’re required to make quarterly tax installment payments to the Canada Revenue Agency (CRA), your final installment payment is due on December 15. If you don’t pay by December 15, you could be hit with interest and potentially late payment penalties.
On or Before December 30
Decide if tax-loss selling is right for you
If you want to take advantage of tax-loss selling and claim a loss for 2024, your sales (trades) must settle by December 31. For securities such as mutual funds that have a T+1 settlement period, the last day to make a trade is December 30. Tax-loss selling — also known as tax-loss harvesting — involves selling underperforming investments in your non-registered accounts that are trading at a loss (below your original purchase price) and using the capital losses to offset capital gains you may have realized that year.
These capital losses can also be used for previous years (up to three years back) or carried forward indefinitely to future years. Saving them for future years may be worthwhile if you may have capital gains in future years, which could occur if you sell assets at a profit.
Keep in mind that there are rules around tax-loss selling — including when you can buy back the same or identical shares, mutual funds or ETFs after you sell — and the strategy may not be right for everyone. Learn more details in What is Tax-Loss Selling? and consult with your tax advisor to determine if it is right for you.
On or Before December 31
Donate to your favourite charities
Making a charitable donation is one of the ways you can significantly reduce the personal tax you pay. The final day to make contributions to a registered charity is December 31 in order to claim the donation tax credits for 2024. Be aware that processing can take time, especially if you are donating securities or property, so it’s best to start early.
Make your RESP and RDSP contributions
To make the most of the government grants and investment growth opportunities that the Registered Education Savings Plan (RESP) and Registered Disability Savings Plan (RDSP) can provide, contribute on or before December 31. The grants can be a significant addition to your savings. Remember to check your RESP and RDSP contribution limits and make sure you don’t exceed them.
Make the most of tax-deductions and claims
Did you know that some common life expenses can be claimed as a credit or deducted as part of your personal income tax return? If you wish to apply these deductions to your 2024 taxes, remember to pay all eligible fees and expenses by December 31. A few examples may include childcare expenses, applicable medical expenses, investment management fees, alimony and any deductible accounting or legal fees. If you’re not sure what you can claim, check with your tax advisor.
Make your TFSA contributions
The Tax-Free Savings Account (TFSA) contribution limit for 2024 is $7,000, and if you have unused contribution room from previous years, you can use that too. To avoid going over you contribution limit, make sure you check your TFSA room. If you don’t already have a TFSA account, you can now open one online with RBC.
Remember FHSA contributions
The First Home Savings Account (FHSA) offers another great opportunity for Canadians to save and invest with tax advantages. The annual contribution period for the FHSA is January 1 to December 31. This means you must contribute on or before December 31 to have your contribution amount deducted from your taxable income. Learn more about the FHSA to find out if it’s right for you.
Use up your health benefits
If you’re fortunate enough to receive employee health benefits, check to see if you have any benefit coverage that can’t be transferred to the next year. If so, consider throwing in a massage, year-end visit to your chiropractor or a new pair of eyeglasses as you schedule other important things for the last days of 2024.
While this suggestion doesn’t apply directly to taxes, it is a way to take advantage of the benefits you’re entitled to. Think of it as a holiday self-care gift to yourself!
Year-end bonus planning
If you receive a bonus prior to year-end, consider contributing to your tax-advantage RRSP retirement savings plan, if you haven’t reached the maximum RRSP contribution limit for this year. Just keep in mind, if the bonus is paid directly to you, there will be withholding taxes.
Get ahead for 2025
While the below deadlines are in the new year, it’s important to stay on track to ensure your tax season goes smoothly.
On or Before January 30
Pay interest on family loans
Did you borrow money from your spouse? Or did you have a prescribed rate loan in 2024 with a spouse or minor child or grandchild? The government gives Canadians 30 days after the year-end to pay the interest on such loans, which means interest on family loans for 2024 is due by January 30, 2025.
On or Before March 3
Make final RRSP contributions
Soon after the New Year’s Eve parties are cleaned up, you’ll probably start hearing a lot about Registered Retirement Savings Plan (RRSPs). This is because the deadline for RRSP contributions is March 3, 2025 if you want to claim the deductions on your 2024 taxes. Check your available contribution room by logging into the My Account service on the CRA website, checking the RRSP Deduction Limit Statement on your latest notice of assessment, giving CRA a call, or learn more. Look at your finances to see how much money you can put away for your future. You can now open an RRSP account with RBC and make contributions online. Learn more here.
Final tip
Filing taxes is always a labour-intensive process, especially if you’re trying to stay financially savvy. But staying on top of all your tax forms, deadlines, and strategies throughout the year can set you up for success well ahead of tax season. For more specific information on filing your year-end taxes, check out our RBC Tax Centre or speak with a tax advisor.
Book an appointment with your advisor to learn which tax-saving strategies best apply to your personal financial situation.
Mutual Funds are sold by Royal Mutual Funds Inc. (RMFI). There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Please read the Fund Facts/prospectus before investing. Mutual fund securities are not insured by the Canada Deposit Insurance Corporation. For funds other than money market funds, unit values change frequently. For money market funds, there can be no assurances that a fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in a fund will be returned to you. Past performance may not be repeated. RMFI is licensed as a financial services firm in the province of Quebec. Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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