Take advantage of tax strategies before December 31 to pay less in taxes
TORONTO, Nov. 29, 2013 /CNW/ - CIBC (TSX: CM) (NYSE: CM) - Canadians who want to take full advantage of various 2013 tax planning opportunities need to act before year end instead of next April, says CIBC's tax and estate planning expert, Jamie Golombek.
"With the holidays approaching, the last month of the year is very busy," said Mr. Golombek. "But it's also an important time of year to put tax planning strategies in place that can help reduce taxes for 2013. Instead of waiting until April to think about tax planning, now is the time when Canadian investors can take advantage of various year end tax strategies, specifically designed to reduce their 2013 taxes. These strategies are easy for Canadians to implement, but they need to act before year end."
Mr. Golombek cites five important tax strategies from his newest report, 2013 Year End Tax Tips.Consider tax-loss selling Tax-loss selling involves selling investments with accrued losses at year end to offset capital gains realized elsewhere in your portfolio. Any capital losses that can't be used currently can either be carried back three years or carried forward indefinitely to offset capital gains in other years. In order for your loss to be immediately available for 2013 (or one of the prior three years), the settlement must take place in 2013, which means the trade date must be no later than December 24, 2013. Prepare for retirement There are a number of tax considerations for those just entering into their retirement years:
- If you turned 71 in 2013, you have until December 31 to make any final contributions to your RRSP before converting it into a RRIF or registered annuity.
- As of July 2013, you can defer your Old Age Security pension by up to 60 months. Future pension payments will be increased by 0.6% for every month that you delay receiving the pension beyond age 65, so your pension could be 36% higher at age 70.