Year-End Tax Planning
Essential strategies to execute before December 31st — RRSPs, capital gains harvesting, and more.
As December 31st approaches, there are several strategies Canadian individuals and business owners can execute before year-end to reduce taxes for the current year. Some have hard deadlines — don't miss them.
Before December 31 (Personal)
- Realize capital losses to offset gains earned earlier in the year.
- Make charitable donations — receipt date must be before Dec 31.
- Pay deductible expenses (medical, professional dues, investment fees).
- Contribute to a TFSA — unused room carries forward but contribution room restarts each Jan 1.
- Convert RRSP to RRIF by Dec 31 of the year you turn 71.
60 Days Into the New Year (Personal)
You have until the first 60 days of the new year (typically March 1) to make RRSP contributions that deduct against the prior tax year.
FHSA contributions follow the calendar year — must be made by Dec 31.
For Corporations
- Bonus declarations must be accrued within your fiscal year end and paid within 180 days.
- Pay dividends before year-end if you want integration for the owner's personal return.
- Accelerate purchases to claim CCA (half-year rule) — but only if it makes business sense.
- Review shareholder loan balances — amounts owing to the corp for > 2 years become taxable income.
Common Year-End Moves
Income splitting with family via dividends from a family trust, prescribed rate loans, or TOSI-compliant arrangements.
Charitable giving via corporate-owned life insurance or flow-through shares.
Tax-loss selling — but beware the 30-day superficial loss rule.
For every incorporated client, we run a year-end tax planning session in October/November to implement these strategies before deadlines pass.
Key Takeaways
- 1December 31 is a hard deadline for donations, tax-loss selling, and FHSA/TFSA optimization.
- 2RRSP contributions have a March 1 deadline for prior-year deduction.
- 3Corporate year-end planning should start in October for maximum benefit.
Need help applying this to your situation?
Our CPA-led team can review your specifics and implement these strategies for you.
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