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BMO Financial Group

December 22, 2011 06:00 ET

BMO Reminds Canadians of End of Year Investing and Tax Deadlines

TORONTO, ONTARIO--(Marketwire - Dec. 22, 2011) - As the New Year approaches, BMO Financial Group reminded Canadians today that December 31st marks the last day to contribute to certain registered plans. It is also a key deadline for Canadians who want to take advantage of tax deductions.

Tina Di Vito, Head, BMO Retirement Institute, cautioned Canadians to act now to get their contributions and tax planning in order before December 31. Waiting until the New Year to start thinking about taxes is often too late, as many of the cut-off dates for tax deductions and credits fall at the end of the calendar year.

"With all the distractions around this time of the year, it's easy to forget about key end-of-year personal finance deadlines. With a little bit of planning and help from a financial or tax professional, making arrangements now can make the New Year less stressful," said Ms. Di Vito.

Tina Di Vito Reminds Canadians of the Following Year-End Deadlines:

Tax-loss Selling - Deadline: December 23

  • If you have investments that have depreciated in value, consider selling these investments before year-end to offset capital gains realized earlier in the year to reduce your overall tax bill. It is important to ensure that a sale makes sense from an investment perspective, since stocks sold at a loss cannot be repurchased until at least 30 days after sale to be effective. Be sure to work with your BMO advisor when implementing this strategy.

RDSP Contributions for Grants and Bonds - Deadline: December 31*

  • Designed for individuals with disabilities, the Registered Disability Savings Plan (RDSP) combines the advantages of tax deferred investment growth with the opportunity to receive government subsidies. December 31 is the annual contribution deadline for receiving Grants and Bonds from the government.
  • December 31 is also the last day for Grants and Bond eligibility for those beneficiaries who are turning 49 years of age, and is the last day contributions are permitted to the plan for those beneficiaries who are turning 59 years of age.
  • For more information on the RDSP, please visit: http://www.bmo.com/home/personal/banking/investments/disability-savings/registered-dsp

Charitable Donations & Other Tax Credits/Deductions - Deadline: December 31*

  • Ensure all charitable donations are made before December 31 in order to receive a tax receipt for 2011.
  • Instead of donating cash to charities, investors could consider donating appreciated publicly-traded securities. This strategy can provide a tax credit equal to the value of the securities donated, while also potentially eliminating the capital gains tax otherwise payable on the gain accrued on the security.
  • December 31 is also the final payment date for a 2011 tax deduction or credit for expenses such as childcare, medical costs, tuition and the recently-introduced children's fitness and arts tax credits.

TFSA Withdrawals - Deadline: December 31*

  • If you are planning a withdrawal from your Tax-Free Savings Account (TFSA), consider making this withdrawal in December instead of waiting until the New Year; a withdrawal would result in additional TFSA contribution room in the following year.
  • For more information on the TFSA, please visit: http://www.bmo.com/home/personal/banking/investments/tax-free/tfsa

RRSP Contributions for those turning 71 - Deadline: December 31*

* Note that December 31 falls on a Saturday this year, so plan accordingly.

In addition, BMO recently issued a release on year-end tax tips for business owners. Please click here for more information.

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