Actions to Consider: Your Year-End Financial Planning Checklist

by | Dec 5, 2023 | Articles

With the arrival of cooler and shorter days, it is a reminder that there are only a few months remaining in the calendar year. Are there actions that you can take before year end to impact your financial position? Here is a checklist of ideas:

Realize capital losses to offset capital gains. For tax purposes, 50 percent of a capital loss can be used to offset taxable capital gains realized during the year. If you do not have sufficient capital gains to offset the losses, you can carry the net capital loss back for three tax years to recover taxes paid on taxable capital gains or carry it forward to use against future capital gains. Be aware of the superficial loss rules, which defer or deny the capital loss if you or anyone affiliated with you acquired the same security within the period 30 days before or after the date of the loss transaction. There may also be opportunities to transfer capital losses between spouses. This should be done well before year end as it can take time for transactions to settle.

Split income, save tax. There are a variety of ways to split income. For example, you may elect to split eligible pension income with your spouse (partner) on your tax return. Spouses may also apply for CPP pension sharing. There may be an opportunity to open a spousal RRSP. Business owners may consider paying reasonable salaries to spouses/children for services provided to a self-employed business or private company. For greater details, contact the office.

Contribute to your RRSP. You don’t have to wait for the February 29, 2024 deadline to make contributions. Contributing as early as possible can allow for greater tax-deferred growth. Consider also that deferring the deduction may provide tax planning opportunities. For instance, if you make a contribution, you can choose to delay the RRSP deduction to a future year, perhaps one in which you have a relatively higher income to offset the higher potential tax.

Make RESP contributions. If you hold a Registered Education Savings Plan (RESP), consider contributing before year end to benefit from the Canada Education Savings Grant (CESG) for 2023.

Don’t forget the pension income tax credit. If you are 65 years of age or older and do not have eligible pension income, you can purchase an annuity or open a small Registered Retirement Income Fund (RRIF) before year end to enable you to claim the federal pension income tax credit.

Convert your RRSP if you turned 71 in 2023. If you have turned 71 this year, you have until December 31st to make any final contributions to your RRSP, and not the regular February 29, 2024 deadline, before converting it into the RRIF or registered annuity.

Review asset location. If you have earned some highly taxed interest income in a non-registered account, there may be an opportunity to review asset location. Or, consider whether a different type of fixed-income asset can reduce your tax bill while still meeting your risk tolerance and personal objectives. We can help.

Withdraw from a TFSA before year end. If you need to access funds and are looking to withdraw from the TFSA, consider doing so before year end. Contribution room resets itself at the start of the calendar year, so waiting until January 2024 would mean that this contribution room will not be available until the start of 2025.

Consider charitable donations. Make eligible charitable donations before December 31st to benefit your 2023 taxes. Gifting publicly-traded securities with accrued capital gains to a registered charity not only entitles you to a tax receipt for their fair market value, but also eliminates the associated capital gains tax. However, the shares must be donated “in kind” — do not sell them first and donate the proceeds or part of the tax benefit will be lost. For securities that have depreciated, consider selling them and donating cash. You will be entitled to the capital loss, as well as a donation tax credit.

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Dave Cooper, CFP®, CIM®
Senior Investment Advisor Portfolio Manager
[email protected]

Tyler Cockbain, BA, CFP®, CIM®
Senior Investment Advisor Portfolio Manager
[email protected]


Justin Nekechuk, B. Ed
Associate Investment Advisor
[email protected]

 Tower Wealth Advisory
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The information contained herein has been provided for information purposes only. Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information has been provided by J. Hirasawa & Associates and is drawn from sources believed to be reliable.

The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document. Wellington-Altus Private Wealth Inc. (WAPW) and the authors do not guarantee the accuracy or completeness of the information contained herein, nor does WAPW, nor the authors, assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances. WAPW is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.