Twelve days of tax tips: Ernst & Young's festive end-of-year guide
The firm says tackling these tips by
1. On the first day, check your list of expenses - twice. Some can only be claimed as tax deductions if the amounts are paid by the end of the calendar year, including interest expense, investment counsel fees and safety deposit box fees. 2. On the second day, shop early and buy business assets. Self-employed individuals and unincorporated business owners who do can claim depreciation for 2009. 3. On the third day, sell securities with accrued losses to shelter otherwise-taxable gains. Don't wait - trades must take place by December 24 for Canadian exchanges (December 28 for US exchanges) to settle in 2009. 4. On the fourth day, get into the holiday spirit and make your final charitable donations for 2009. Gifting stock can provide added benefit. 5. On the fifth day, decide if your rooftop is ready for Santa's sleigh. The home renovation tax credit is only available on expenditures made before February 1, 2010. The credit is worth up to $1,350 on your 2009 return if eligible improvement costs are at least $10,000. 6. On the sixth day, consider giving yourself the gift of a tax shelter to reduce your tax burden. But be cautious - these investments carry risk so consult your investment advisor before you buy. 7. On the seventh day, think about family. All tax-deductible alimony and child-care expenses must be paid by December 31 to get a 2009 tax deduction. Also, medical expenses, kids' fitness program costs and transit pass payments must be made by year end to be creditable. 8. On the eighth day, invest in the future by making RESP contributions for your children, and benefitting from the Canada Education Savings Grant in the process. 9. On the ninth day, share your income with family using income- splitting loans. With the current Canada Revenue Agency prescribed interest rate of 1%, this is an excellent tax-saving opportunity for those with liquid or certain other assets, who are interested in income splitting with spouses, partners and/or children and grandchildren. This could also benefit anyone who has an outstanding income splitting loan with a rate higher than 1% - but remember, annual interest must be paid by January 30 of the following year to avoid income attribution. 10. On the tenth day, update 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. But they have to advise employers in writing before year end to benefit. 11. On the eleventh day, take a breather and push your purchases of long- term fixed investments until January 2009 to defer the related tax by one year. 12. On the final day, contribute to your RRSP and think about making your 2010 contribution in early January. You can choose to contribute to a spousal plan, or your own plan.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.
For more information, please visit ey.com/ca.
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, a UK company limited by guarantee, does not provide services to clients.
The Ernst & Young organization is divided into five geographic areas and firms may be members of the following entities: Ernst & Young Americas LLC, Ernst & Young EMEIA Limited, Ernst & Young Far East Area Limited and Ernst & Young Oceania Limited. These entities do not provide services to clients.
For further information: For further information: Amanda Olliver, [email protected], (416) 943-7121; Brooke McLachlan, [email protected], (604) 899-3597; Marie-Ève Graniero, [email protected], (514) 874-4313
Share this article