Year-Round Tax Planning Calendar
| Month | Action |
|---|---|
| January | Review prior year strategy, make final RRSP contribution (deadline March 1) |
| February | Gather tax documents (T4, T5, T3, RRSP receipts) |
| March 1 | RRSP contribution deadline for prior tax year |
| April 30 | Personal tax filing deadline |
| June 15 | Self-employed filing deadline (tax still due April 30) |
| September | Mid-year tax review, adjust installments if needed |
| November-December | Tax-loss harvesting, make charitable donations |
| December 31 | TFSA/FHSA contributions, last day for other deductions |
Strategy 1: Maximize Registered Accounts
| Account | Annual Limit | Tax Benefit | Best For |
|---|---|---|---|
| RRSP | 18% of income (max ~$32,490) | Tax deduction now, taxed on withdrawal | High earners expecting lower retirement income |
| TFSA | $7,000 (2024-25) | Tax-free growth and withdrawals | Everyone — flexible tax-free investing |
| FHSA | $8,000 | Tax deduction + tax-free withdrawal for home | First-time home buyers |
| RESP | $2,500/year (for 20% grant) | CESG grant + tax-deferred growth | Parents with children |
Optimal RRSP vs TFSA Decision
| Situation | Better Choice |
|---|---|
| Marginal rate over 30% now | RRSP (deduction worth more now) |
| Marginal rate under 25% | TFSA (save deduction for higher-income years) |
| Variable income year to year | RRSP in high years, TFSA in low years |
| Expect higher income in retirement | TFSA (avoid higher tax on RRIF withdrawal) |
Strategy 2: Income Splitting
Methods Available
| Method | Who Can Use | How It Works |
|---|---|---|
| Spousal RRSP | Any couple | Contribute to spouse’s RRSP, claim deduction |
| Pension income splitting | 65+ (or any age with DB pension) | Allocate up to 50% to spouse |
| CPP sharing | Couples 60+ | Share CPP based on years together |
| Prescribed rate loan | High earner → lower-income spouse | Lend at CRA prescribed rate (currently 4%) |
| RESP contributions | Parents/grandparents | CESG returns to child’s account |
| TFSA contributions | Give spouse money to contribute | Growth is tax-free regardless |
| Hiring family in business | Self-employed/incorporated | Pay reasonable salary to family members |
Prescribed Rate Loan Example
| Detail | Amount |
|---|---|
| Loan to spouse | $200,000 |
| CRA prescribed rate | 4% (must pay annually) |
| Interest payment to lending spouse | $8,000/year (taxable to lender) |
| Investment return (7%) | $14,000/year (taxable to borrowing spouse) |
| Net income shifted | $6,000/year |
| Tax savings (~20% bracket difference) | ~$1,200/year |
Strategy 3: Tax-Loss Harvesting
| Step | Action |
|---|---|
| 1 | Identify non-registered investments with unrealized losses |
| 2 | Sell to crystalize the loss |
| 3 | Use loss to offset capital gains this year |
| 4 | Carry back unused losses 3 years or forward indefinitely |
| 5 | Wait 31+ days before repurchasing (superficial loss rule) |
Superficial Loss Rule
| Action | Allowed? |
|---|---|
| Sell ETF, wait 31 days, buy same ETF | ✅ Yes |
| Sell XIC, immediately buy XIU | ⚠️ Grey area (similar but not “identical”) |
| Sell ETF, buy back next day | ❌ No (loss denied) |
| Sell in non-reg, buy in TFSA within 30 days | ❌ No (loss denied permanently) |
| Spouse buys same investment within 30 days | ❌ No (affiliated person rule) |
Strategy 4: Capital Gains Timing
| Strategy | Details |
|---|---|
| Defer gains to next year | Sell after December 31 to push gains to next tax year |
| Realize gains in low-income year | Sabbatical, parental leave, or between jobs |
| Donate appreciated securities | Zero capital gains tax + donation credit |
| Use capital gains reserve | Spread gain over up to 5 years on qualifying sales |
| Trigger gains at death (planning) | Consider pre-death gifting or insurance |
Strategy 5: Medical Expense Optimization
| Tip | How It Saves |
|---|---|
| Choose best 12-month period | Any 12-month period ending in the tax year |
| Lower-income spouse claims | Threshold (3% of income) is lower |
| Combine family expenses | One claim for you + spouse + dependents |
| Prepay December expenses | Bunch into optimal 12-month window |
| Private health insurance premiums | Fully eligible as medical expenses |
Strategy 6: Charitable Donation Optimization
| Strategy | Benefit |
|---|---|
| Bunch donations in one year | Get past $200 low-credit threshold |
| Donate appreciated securities | No capital gains tax + full credit |
| One spouse claims all | Maximizes credit rate |
| Donate in highest income year | 33% rate if income over $240K |
| Name charity as RRIF beneficiary | Offsets final return income inclusion |
Strategy 7: Business / Self-Employment
| Strategy | Benefit |
|---|---|
| Incorporate (income $100K+) | Small business rate (12.2% federal on first $500K) |
| Individual pension plan (IPP) | Larger tax-deductible contributions than RRSP |
| Year-end expense timing | Accelerate expenses, defer income |
| Automobile deduction | Business-use portion of vehicle costs |
| Home office deduction | Proportional home costs |
Incorporation Tax Deferral
| Scenario | Without Corp | With Corp |
|---|---|---|
| Business income | $200,000 | $200,000 |
| Personal tax rate | ~43% | — |
| Corporate tax rate | — | ~12.2% |
| Tax on $200K | $86,000 | $24,400 |
| Tax deferred | $61,600 |
Note: Tax is deferred, not eliminated. Tax applies when dividends are paid out (integration principle).
Strategy 8: Education and Training
| Credit | Details |
|---|---|
| Tuition tax credit | 15% federal on tuition paid |
| Canada training credit | Up to $250/year (ages 26-65) |
| Student loan interest | 15% federal credit on interest paid |
| Employer-funded training | May be non-taxable benefit |
| Moving for school | Moving expenses deductible if 40+ km |