TORONTO, Dec. 14 /CNW/ - Many Canadians will find their wallets getting
lighter as the holiday shopping frenzy goes into full tilt. Ernst &
Young is offering 12 days of year-end tax tips to keep some of that
money from disappearing for good and to get people saving before
ringing in the new year.
On the first day, forget the partridge in a pear tree. Instead pay
tax-deductible expenses before the end of the season. A variety of
expenses can only be claimed as deductions in a tax return if the
amounts are paid by the end of the calendar year. So pay these and reap
the benefits of a tax-deduction or credit in your 2010 returns.
On the second day, review your investment portfolio before trimming the
tree. Consider realizing a loss on securities to reduce capital gain
realized earlier this year. Keep in mind that the final trade date for
2010 Canadian exchanges is December 24 in order for trade to be
considered a 2010 disposition.
On the third day, hurry up and wait. By holding off on investing in
long-term fixed income investments before the holidays, you may defer
tax payments in 2012 by purchasing in January 2011.
On the fourth day, make a New Year's resolution. Wait to purchase mutual
fund investments until after pre-year-end distribution, and avoid
paying tax on this year's end distribution.
On the fifth day, give yourself the gift that keeps on giving. Invest in
flow-through shares and receive a tax deduction roughly equal to the
amount of the investment. Or donate the investment to charity, and any
capital gains will not be subject to tax.
On the sixth day, share the holiday spirit and savings with family. With
the prescribed interest rate of 1%, intra-family loans are an excellent
tax-saving opportunity for individual with liquid or certain other
assets interested in income splitting with spouses, partners and/or
children and grandchildren.
On the seventh day, save like Scrooge. If you regularly receive tax
refunds because of deductible RRSP contributions, child-care costs or
spousal support payments, consider requesting Canada Revenue Agency
authorization to allow your employer to reduce the tax withheld from
On the eighth day, shop early and buy business assets. Self-employed and
unincorporated business owners who shop before year end can claim
depreciation deduction for 2010.
On the ninth day, consider who's been naughty and nice at work.
Corporate business owners should make decisions about final
remuneration. They should remember that holiday bonuses don't have to
be included in their employees' 2010 personal income if paid in the
first 179 days of 2011, allowing for a deferral of tax on salary.
On the tenth day, invest in the future. Make RESP contributions for your
children and the federal government will donate a Canada Education
Savings Grant in the process.
On the eleventh day, find the perfect gift. Make your Tax-Free Savings
Account contributions as early as possible in 2011 and fund your spouse
or partner's contributions without attracting the attribution rules.
On the twelfth day, check this list twice and have a happy holiday
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and
advisory services. Worldwide, our 141,000 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.
SOURCE EY (Ernst & Young)
For further information: For further information: