Plan now to save in 2015: EY popular year-end tax guide available now

Year-end presents perfect opportunity to review and update plans

TORONTO, Dec. 19, 2014 /CNW/ - With the new year quickly approaching, now is the time for individuals and business owners to consider options to help reduce tax balances in April, according to EY's publication, Top ten year-end tax conversations, in TaxMatters@EY.

"At this time of the year, many people are carefully budgeting for the holiday season, but tend to forget about what can be done now to prevent a large personal tax balance in April." says David Steinberg, EY Tax Partner and National Private Mid-Market Co-leader. "The end of the year presents the perfect opportunity to review and update estate planning and succession planning needs," says Steinberg. "Considering options like an estate freeze can be effective for "crystallizing" tax liability today, and allows for certainty of future tax liability and planning for funding."

EY has identified the top ten conversations all individuals and business owners should have with their tax advisor to help save on their tax bill — just in time for the new year: 

1.	Look for income-splitting techniques available to you. Consider income splitting loans. The prescribed interest rate applicable to the exemption from income attribution on intra-family loans remains at a low 1% for loans created in 2014.
2.	Pay your 2014 tax-deductible or tax-creditable expenses. There are a number of expenses that can only be claimed as deductions in a tax return if the amounts are paid by the end of the calendar year.  Consider accelerating early 2015 payments if you can benefit from a tax deduction or credit in your 2014 return.
3.	Maximize your tax-sheltered investments by contributing to a TFSA or an RRSP. The earlier you contribute, the more time your investments will have to grow.
4.	Maximize your education savings by contributing to an RESP for your child or grandchild. Make RESP contributions for your child or grandchild before the end of the year. With a contribution of $2,500 per child under age 18, the federal government will contribute a grant (CESG) of $500.
5.	Reduce or eliminate your non-deductible interest. Interest on funds borrowed for personal purposes is not deductible. Where possible, consider using available cash to repay personal debt before repaying loans for investment or business purposes on which interest may be deductible.
6.	Update your travel log. If you use an employer-provided car primarily for business, you may be eligible to reduce your automobile benefits if your business driving meets certain thresholds. You must keep a detailed logbook to support the business portion of your driving.
7.	Review your investment portfolio. Check to see if you have any accrued losses to use against realized gains. While taxes should not drive your investment decisions, it may make sense to sell loss securities to reduce capital gains realized earlier in the year.
8.	Prepare to file your 2014 tax return. If, at any time in the year, you held certain specified foreign investment property with a total cost of more than $100,000, you are required to file an information return (Form T1135) with your personal tax return for the year, reporting details for each of those investments.
9.	Improve the cash flow impact of your income taxes. If you regularly receive tax refunds because of deductible RRSP contributions, child-care costs or spousal support payments, consider requesting CRA authorization to allow your employer to reduce the tax withheld from your salary (Form T1213).
10.	Consider estate and succession planning. You should review and update your will periodically to ensure that it reflects changes in your family status and financial situation, as well as changes in the law. Your succession plan involves devising a strategy to ensure that the benefit of your assets passes to the right people at the right time.

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SOURCE: EY (Ernst & Young)

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