make sense from a tax perspective to draw some money out in 2018 to avoid a potentially higher tax rate to avoid a potentially higher tax rate later.
3. Trigger capital gains or
investment losses.
While no like it when markets corrects it may be a good time to sell a position to make an investment loss or to crystalize gain. There are rules surrounding so be sure you run the idea past your advisor first.
4. Contribute to a Registered Education Savings Plan for
your child.
RESP’s allow for tax efficient savings for your child’s post-secondary education. The federal government provides a Canada Education Savings Grant (CESG) equal to 20 percent of the first $2500 of annual RESP contribution per child or $500 annually. If you’ve missed a year of contribution, you can ‘catch-up’ up to one year and contribute $5000 and receive up to $1000.
5. Contribute to a Registered
Disability Savings Plan.
RDSP’s are tax-deferred savings plans open to Canadian residents eligible for the Disability Tax Credit., their parents and other eligible contributors. Federal government assistance in the form of Canada Disability Savings Grant (CDSGs), which are based on contributions, and Canada Disability Savings Bonds (CDSBs) may be deposited directly into the plan up until the year the beneficiary turns 49. The government may contribute up to a maximum of $3,500 CDSG and $1,000 CDSB per year of eligibility depending on the net income of the beneficiary’s family. Eligible investors may wish to contribute before December 31st, 2018 to get this year’s assistance. The plan has been around since 2008, and there is a 10-year carryforward. This means that beneficiaries that have qualified for the DTC since 2008 may actually lose entitlements after 2018
6. Make any charitable
donations.
Charitable donations must be done by year-end to qualify for 2018 taxes. Consider this, if you like to donate but have lower income, why not donate in your adult child’s name. If they are not retired, their income could be higher, and they benefit more from the donation tax credit. Investors with non-registered money with a capital gain could also consider donating the investment in-kind. It would give you donation
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