ANALYSIS: It’s the season of giving, so why not give yourself a nice tax break?
You don’t need to file until the spring, but as the 2015 tax year
draws to a close there are things you can do to make it easier and
maximize savings.
The best place to start is organizing eligible tax credits such as
charitable donations, kids’ sports and arts payments, transit passes,
education and healthcare expenses.
If you’re fortunate enough to get a year-end-bonus it will probably
be taxed in your highest bracket. You can avoid the tax by putting it in
your Registered Retirement Savings Plan before the February 29
deadline. If you don’t have room consider a spouse’s RRSP. That tax
return could come in handy paying holiday bills in the new year.
Another option for a bonus or any other money is a Tax Free Savings
Account. There is no deadline to contribute, but the contribution
deadline will be increased by $5,500 effective January 1st. That brings
the total contribution limit to $46,500. Any gains produced in the
account are exempt from taxation.
If you’ve accumulated equity losses outside an RRSP or TFSA, consider
tax-loss-selling. Any losses can be offset against capital gains going
back three years or forward indefinitely.
If you want to buy the same stock back it’s important to know the loss does not apply if you buy it back within 30 days.
Tax-loss-sales must settle before the end of the year, and that takes
three days. The deadline to make the sale is December 24 in Canada and
December 28 for U.S. equities.
Courtesy BNN
Call us at Tax-Books Inc. for all advice and services: 905-616-5500
http://www.tax-books.ca/contact-us
http://www.bnn.ca/News/2015/12/14/Year-end-tax-tips-that-can-save-you-money.aspx
