Act fast to save on taxes
Between marking exams and planning your holidays, your calendar is sure to be busy this time of year. Nevertheless, it will pay you (literally!) to take the time to ensure your finances are organized before the ball drops at midnight New Year’s Eve.
Here’s a list of financial ‘to-do’s’ you’ll be happy you did, when it’s time to do your tax return for 2016:
- Stock up on school supplies: The new School Supply Tax Credit helps compensate teachers and early educators for school supply expenses they incur in the year. It’s mostly consumable goods that are eligible. You can find more information here: http://www.cra-arc.gc.ca/gncy/bdgt/2016/qa03-eng.html
- Pre-pay any 2017 Children’s Arts & Fitness Activities: 2016 is the last year for tax credits for children’s arts and fitness classes, so if possible, pay for next year’s activities before Dec. 31, and save up to $250 of expenses on artistic or cultural activities and up to $500 of expenses on physical activity programs.
- Renovate for home accessibility: The new Home Accessibility Tax Credit permits a claim equal to 15% of up to $10,000 for renovations to assist seniors and those eligible for the disability tax credit to be more mobile or functional in their home. You can find more information here: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/398/398-eng.html
- Re-balance Corporate Class Mutual Funds: Currently, switching between corporate class mutual funds isn’t immediately taxable, but starting Jan. 1, 2017, new federal rules mean it will be. Re-balance portfolios by the end of the year to avoid triggering a taxable disposition in the new year.
- Open or contribute to an RESP. Maximize the grant you receive by making your annual contribution by the end of the year.
- Remember your Tax Free Savings Account. While the end of the year isn’t really a deadline (since the total you can contribute to a TFSA is cumulative), why not make a point of contributing by a certain date, to make sure it doesn’t slip your mind?