Tax Planning for the end of the year!
October 31st, 2012
It’s getting close to the end of 2012, so what can you do to lower your tax bill?
It was a better for many investments in 2012, and you may have sold some investments and now have some capital gains to record on your income tax return. If you have any investments with losses, you can sell these, to offset the tax on the investments with gains. However, in order to not have this loss denied by the Canada Revenue Agency, you must not acquire identical investments during the period 30 days before and ending 30 days after the date the investments are sold.
If you turned 71 in 2012, you are still able to contribute to your own RRSP until December 31st if you have sufficient contribution room. After December 31st of the year you turn 71, you can contribute, up to your RRSP contribution limit, to a spousal RRSP or common-law partner RRSP, if your spouse or common-law partner is 71 or younger on December 31st of the year you make the contribution.
If you are a sole proprietorship and are considering making a capital purchase for business use, then consider buying it before the end of the year rather than at the beginning of the following year. This will accelerate the capital cost allowance claim by one year. For employees who are required to use their own vehicle for employment purposes (T2200 completed by their employer), this also applies to you if you are considering a new vehicle purchase!