Twelve days of tax tips: Ernst & Young's festive guide to savings

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.

  1. 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.
  2. 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. 
  3. 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. 
  4. 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. 
  5. 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.
  6. 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.
  7. 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 your salary.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. On the twelfth day, check this list twice and have a happy holiday season!

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

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:

Brooke Morris 
604 899 3597 
Julie Fournier 
514 874 4308   
Serina Yau
416 941 1810

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890