Q: The year has gone by very quickly and I realize my finances could use some help. What can I do to save on taxes before the end of 2024?
A: If your finances could use help, it is not too late to talk to your Account Manager, discuss your situation and benefit from our professional advice. Of course, with the last quarter of the year hurtling towards 2025, you can elect to take some concrete actions which will benefit you when your 2024 Income Tax Return is being completed.
2024 has been a good year in the financial markets! That said, you may have some non-registered assets which have under-performed. Consider selling your under-performing investments to offset capital gains you have likely accumulated over the year on your much better performing non-registered assets. Get professional advice before taking action on this to ensure you do not trigger capital gains.
To share some of your good fortune, consider making a donation to your favorite charity before the year ends! If you really wish to ramp up your charitable donations, talk to your Account Manager about taking out a life insurance policy to benefit the charity of your choice! Not only will this feel great, it can benefit either your current or final taxes!
If you are making less than the maximum RESP contribution limit, consider “topping up” your 2024 RESP contributions subject to the prescribed limits. Getting the maximum benefit is always welcome.
Assuming you have the contribution room available, making a RRSP contribution may be an idea. You may even wish to get an RRSP loan to top up your RSP {for example if you have already contributed $4,000.00 to your RRSP for 2024, you have a 28.20% marginal tax rate, you could borrow $1,571 for your RRSP under a 90 day no pay RRSP loan offering at 7.00% interest - at tax time your refund (assuming no other offsets) will enable you to pay off your RRSP loan balance with only a nominal interest charge (roughly $27.12)}.
For those between the ages of 65 and 71, you may wish to convert your RRSP into a RRIF earlier than required and make a withdrawal this year to take advantage of the $2,000.00 pension tax credit (if you aren’t already receiving it).
Another simple way to defer taxes by a year is to delay upcoming GIC rollovers and/or purchases until January 2025.
If you already expect your medical receipts to make up more than 3% of your 2024 income, now would be a good time to buy glasses, hearing aids, orthotics, medical supplies, prescriptions and getting dental work done. That way you increase your 2024’s medical deductions more effectively.
Finally, consider taking a course in 2024 to not only benefit your profession (assuming you are still working and under age 66), but also to utilize some or all of your accumulated Canada Training Credits.
Work with your Account Manager and let MWFS guide you to your financial success!!
