Top Year-End Tax Tricks Most Canadians Miss

December 31st is your last chance to lock in big tax savings. Yet, I think that most Canadians will miss at least one of these easy wins in this list. So,

let's start with the TFSA. Now, if you plan to take money out of your TFSA, the timing of the withdrawal matters a lot.

When you pull money from a TFSA, you don't get that contribution room back until January 1st of the next calendar year. If you withdraw in January instead

year. If you withdraw in January instead of December, you lose the ability to recontribute for an entire extra year.

So, if you need the cash from your TFSA, make sure you do it before December 31st. For example, meet Will, who has a

31st. For example, meet Will, who has a fully maxed out TFSA worth $100,000 and he needs $15,000 for a home renovation.

If he goes with option A, which is to withdraw on December 30th of 2025, he'll take out $15,000. Then on January 1st,

2026, Will gets that $15,000 of contribution room back. And now he could recontribute anytime in 2026 if he has extra cash or say a tax refund or a

bonus. But if he goes with option B,

bonus. But if he goes with option B, which is to withdraw on January 3rd, then he'll take out $15,000, but he won't get that room back until January

1st of 2027. So, by doing that, he'll miss out on that $15,000 of room for the entirety of 2026. Next is FHSA. If you

don't have an FHSA yet and you qualify for one, open one up before December 31st. Even if you're not ready to put

31st. Even if you're not ready to put money in, just opening it locks in this year's $8,000 of room. And most people don't realize this, but the FHSA contribution room doesn't pile up

forever like the TFSA room does. you

only get $8,000 a year and you could only carry forward another $8,000 and that's it. So the most room you could

that's it. So the most room you could ever have available at once is $16,000.

And here's why the year end matters. Now

let's say Will wants to buy a home in a few years. So Will opens his FHSA in

few years. So Will opens his FHSA in December of 2025 and he instantly gets $8,000 of room for 2025. On January 1st of 2026, he gets another $8,000. Will

now has $16,000 available, even if he didn't put a single dollar into it yet.

Now, if he had waited until 2026 to open it, he'd only get the $8,000. The 2025

room would be gone forever. And if you already have an FHSA, try to contribute as close to the $8,000 annual max as you can by December 31st. You get a tax

deduction like an RRSP. And the growth is also taxfree, just like a TFSA when you buy your first home. To me, it combines the best of both worlds of these two accounts. So, make sure you

contribute to it. So, here's an example.

Will puts $8,000 into his FHSA in December. When he files his taxes, he

December. When he files his taxes, he gets a deduction that lowers the taxable income for 2025. Meanwhile, that $8,000 can start growing taxfree inside the account. And when he eventually buys a

account. And when he eventually buys a home, he could withdraw both the money and the growth without paying any tax.

And if you never end up buying a home, well, nothing is wasted. you could roll your FHSA into your RRSP taxfree and keep growing it for retirement. Which

brings us to the RRSP. Now, the deadline for the 2025 contributions is March 1st of 2026. So, you don't have to rush

of 2026. So, you don't have to rush before the year end, but contributing earlier still has its benefits. The main

one is that you might get your tax refund sooner if you do that. And your

money will start investing and compounding earlier. And if you're

compounding earlier. And if you're planning to say use the home buyer plan, which is tied to your RRSP, those funds are already inside the RRSP when you need it. So again, let's go back to

need it. So again, let's go back to Will, who plans to contribute $6,000. If

he does it in December instead of waiting until February, he gains extra time invested in the market. He's also

been looking at buying a house. And if

he ends up using the home buyer plan, the money is already available and waiting in his RRSP. Before going on to the next one, if you're watching this and thinking, I don't want to miss any of these deadlines. That's exactly what

we help with at Blueprint Financial. We

build tax efficient plans for Canadians so more of your money stays in your pocket, not the CRAAS. So, book a discovery call with us today and build the life you want with the right

blueprint. Our next is the RESP. So,

blueprint. Our next is the RESP. So,

gives you free money from the government. Essentially, they match 20%

government. Essentially, they match 20% of what you can contribute up to $500 each year per child. And if you don't contribute in a year, you're missing out

on that government grant. You can catch up later, but only one year at a time since the government only pays a maximum of $1,000 per year in grants. So, going

back to Will, he puts $2,500 into his daughter's Mia's Resp $500 grant for 2025. If he waits until the next year, he's now behind and

catching up can be a bit tougher. So

even just a small contribution before the year end keeps you from losing some free grant money. Next is income splitting. So I'm going to show you a

splitting. So I'm going to show you a couple different things you could do here. So if one partner earns a lot

here. So if one partner earns a lot more, income splitting can lower your taxes in retirement and help you avoid things like say the OAS clawback. So two

common year-end moves, first of all is the spousal RRSP. This is where the higher income partner contributes to the lower income partner's RRSP and later the withdrawals are taxed in the lower

income partner's name. The deadline is usually March 1st, but if your spouse turns 71 this year, the deadline is December 31st. Be aware of the

December 31st. Be aware of the attribution rules though. If the lower income spouse withdraws within 3 years of the contribution, the tax goes back to the higher earnner. So, this is a

longer term play. So going back to the example of Will who makes $120,000 this year and his partner Emma makes only $45,000. Will then put $5,000 into

only $45,000. Will then put $5,000 into a spousal RSP for Emma before the deadline. And fast forward to

deadline. And fast forward to retirement, Emma will now withdraw that money in a much lower income tax bracket and that keeps their combined income lower and helps them stay below the OAS

clawback threshold. One simple move and

clawback threshold. One simple move and it's thousands of dollars saved. Next is

what's called CPP pension sharing. This

is a little bit different than income splitting. Now, if you want your CPP

splitting. Now, if you want your CPP income tax more evenly next year, apply before December 31st, CPP sharing only starts once Service Canada approves it

and you can't backdate it. So, for

example, will CPP will be $1,100 a month and Emma's will be $450. They apply this year and next year, Service Canada starts splitting the payments. part of

will CBP is taxed in Emma's name and their combined tax bill goes down just by filling out a form. This is the kind of stuff that accountants geek out over and now you're also in the club. For

more income splitting tips, check out our guide for seven other strategies to legally reduce your tax bill you grab for free. The link is in the

for free. The link is in the description. Next up is the RDSP. If you

description. Next up is the RDSP. If you

or a family member qualifies for the disability tax credit, make sure the RDSP is open and funded before December 31st. Even a small contribution can

31st. Even a small contribution can trigger very big federal grants and bonds, and the amounts can be surprisingly large. It's kind of similar

surprisingly large. It's kind of similar to the RESP in this sense, but even higher amounts. The lifetime government

higher amounts. The lifetime government matching on an RDSP can reach tens of thousands of dollars, but you only receive it if the account is set up and money goes in. So, if you're eligible and haven't contributed yet, doing it

before the year and can unlock a lot of grant money you won't get otherwise.

Next is medical expenses. If you had medical costs this year, it's worth checking whether paying a few remaining bills before December 31st could push you over the threshold for the medical

expense tax credit for the 2025 tax year. The way this credit works is it's

year. The way this credit works is it's applied to eligible expenses that exceed the lesser of 3% of your net income or about $2,800 in 2025. Hitting that

threshold can unlock a tax deduction you'd lose by waiting until the next year. This includes things like dental

year. This includes things like dental work, prescription medication, glasses or contact lenses, mobility aids, and certain therapy costs. So, if you're close to that limit of where you might

get that credit, you might want to book, say, a dental appointment, filling prescriptions, or buying needed medical equipment before the year end, which could increase your claim. Even a small

end of the year expense can make the difference between getting nothing back or claiming quite a lot of money. The

charitable donation tax credit gives you 15% back federally on the first $200 you donate and 29% on anything above that.

provinces add their own credit on top of that. Alberta's, for example, is

that. Alberta's, for example, is especially generous, which gives 60% on the first $200. So, the savings can be quite high. So, Will lives in Alberta

quite high. So, Will lives in Alberta and donates $100 to a registered charity before December 31st. He gets a 15% federal credit plus a 60% provincial

credit, which adds up to a $75 tax credit on his $100 donation. Now, you

may claim donations up to 75% of your net income. carry unused amounts forward

net income. carry unused amounts forward for up to five years and even pool donations with your partner to maximize his credit. Next is to maximize your

his credit. Next is to maximize your employer benefits. This one isn't

employer benefits. This one isn't technically a tax credit, but it can provide thousands of dollars in benefits before the year end. Many workplace

health and wellness benefits reset on January 1st. So, if you still have

January 1st. So, if you still have dental, vision, massage, or health spending allowance dollars sitting around unused, now is the time to book appointments or submit receipts so the

money doesn't disappear. A lot of people also forget about unused vacation days.

If your company has a use it or lose it policy and days don't roll over into the new year, taking those days off now is the same as saving money. Otherwise,

you're just handing free paid time back to your employer. Capital loss

harvesting. If you have investments that dropped in value this year and want to sell them, doing it before December 31st can offset capital gains and reduce your tax bill. The trade has to settle by

tax bill. The trade has to settle by December 31st. So, waiting until the

December 31st. So, waiting until the last couple of days can be a little risky. And watch out for the superficial

risky. And watch out for the superficial loss rules. If you sell a stock or ETF

loss rules. If you sell a stock or ETF at a loss and buy it back within 30 days, the loss will be denied. That rule

also applies if your spouse or corporation buys it back for you. So,

for example, if Will sold an ETF that was down $3,000 this year and used the loss to offset gains that he had from selling another investment earlier in the year. to stay invested. He bought a

the year. to stay invested. He bought a different ETF that tracks a similar index instead of repurchasing the same one, avoiding the superficial loss rule.

For anyone with capital gains, harvesting losses before year end can be an easy tax win. This next one's for the business owners. If your business year

business owners. If your business year end is December 31st, doing things like buying equipment or assets before the year end lets you write them off sooner.

You could also pay salaries, dividends, and bonuses before the year end to get that tax write off for this fiscal year.

And if your corporation has a different fiscal year end than December 31st, the same idea applies. Just move these actions before your year-end date. So

the deductions fall into the current tax year instead of the next one. Now, going

back to Will, he owns a small corporation with a December 31st year end. He buys a new laptop in December,

end. He buys a new laptop in December, pays out bonuses to his staff, and pays himself a bigger dividend. And all three of these moves reduce his taxable income

for this year instead of the next. These

simple year- end moves can mean thousands in tax savings. Most people

never learn this, but you just did. And

if you want a personalized plan, so none of this falls through the cracks, visit our website. Our planners can help build

our website. Our planners can help build a taxefficient road map for you. Make

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