TORONTO, Dec. 11 /CNW/ - The coming days will see people rushing from
holiday parties to family gatherings in time to the familiar strains of
traditional carols. As the calendar ticks down to New Year's Eve, Ernst &
Young is reminding everyone to make a little time in between for a few
important tax tips that will serve them well - if addressed before December
31. Feel free to sing along as you make your way through our list of tax tips,
checking it twice!
1. On the first day, pay year-end expenses. Many can only be claimed
as tax deductions if the amounts are paid by the end of the
2. On the second day, be generous and donate public company
securities. There will generally be no income inclusion in respect
of the accrued gain and the full value of the gifted securities
will be eligible for a donation credit.
3. On the third day, purchase a tax shelter. If purchased in the final
month of the year, tax shelters can result in major tax savings;
but be careful as the CRA scrutinizes these arrangements very
4. On the fourth day, remind the seniors you know to contribute to an
RRSP. The extension of the RRSP maturity age offers seniors new
opportunities but for those who are 71 at the end of the year, the
final RRSP contribution must be made, and options selected, by
5. On the fifth day, contribute to an RESP to save for your child's
6. On the sixth day, take time out to sell securities with accrued
losses to shelter realized gains from tax. Trades must be settled
in 2007 to be considered a 2007 disposition.
7. On the seventh day, take a breath; defer purchases of long-term
fixed investments until January 2008, and the related tax will be
deferred one year.
8. On the eighth day, defer purchases of mutual funds, as the
distribution amount is effectively included in the purchase and
will be taxable in your 2007 return.
9. On the ninth day, corporate business owners should make decisions
about their final remuneration from the company.
10. On the tenth day, buy business assets; self-employed individuals
and unincorporated business owners who would otherwise make these
capital purchases in the near future should consider shopping early
to claim depreciation for 2007 (although it's only half of the
regular depreciation amount).
11. On the eleventh day, update those travel logs; employees who use
employer-provided cars primarily for business may be eligible for a
reduced standby charge and a lower alternate operating benefit. If
so, advise employers in writing before year-end in order to have
the alternate operating benefit apply.
12. Last but not least, on the twelfth day start looking ahead to 2008;
the general GST rate and harmonized sales tax rate reductions are
effective January 1. The reduction will bring on many transitional
and practical issues that GST-registered businesses need to
consider as soon as possible.
About Ernst & Young
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restoring the public's trust in professional services firms and in the quality
of financial reporting. Its 130,000 people in 140 countries pursue the highest
levels of integrity, quality and professionalism in providing a range of
sophisticated services centred on our core competencies of auditing,
accounting, tax and transactions. Further information about Ernst & Young and
its approach to a variety of business issues can be found at
ey.com/ca/perspectives. Ernst & Young refers to the global organization of
member firms of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited does not provide services to
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