This post is from the past but updated annually. I follow this list every year!
Similar to the end of the year tax tips, there are certain financial to-do items to start off the year on a strong note. Here is the checklist that I use at the beginning of the year.
1. Contribute to your TFSA
For 2017, TFSA’s get $5,500 in contribution room ($52,000 total since 2009). If you made a withdrawal in 2016, then this year, you can contribute up to $5,500 plus the 2016 withdrawal amount. For more details about your TFSA contribution room, here are the details.
2. Maximize your RESP contribution
For those of you with kids, a new year means more government matching for your RESP! The federal government will match 20% of your RESP contribution which maxes out at $500 per child per year. To max out the government contribution, you’ll need to contribute $2,500 per child to the RESP account. (how does an RESP work?)
Haven’t opened an account yet? We have ours with TD e-series, but if we had a child today, I would likely open it with a brokerage that offers commission free ETFs. Also, don’t worry if you haven’t started contributing yet, you can still catch up on your RESP contributions!
3. Contribute to your RRSP
Another contribution?! I know, by the end of January, our savings stock pile definitely takes a hit – but it’s worth it! Even though it’s no longer 2016, you can still contribute to your RRSP (or not) to your tax advantage. The RRSP contribution will act as a deduction, so if you have tax owing (ie. from capital gains or side business etc), or in a high tax bracket, it may make sense to make a contribution. RRSP contributions made between now and the RRSP deadline (March 1. 2017) can be claimed for either 2016 or 2017 tax year (or carried forward).
4. Re-balance your Portfolio
If you have significant capital gains in a non-registered portfolio that requires re-balancing, then early in the year is the best time to do it. Why? Simply because capital gains tax is deferred for over a year – that is when you file 2017 taxes in late winter 2018. Also, now is a good a time as any to re-balance some of those holdings.
5. Prepare for filing 2016 Taxes
With 2016 over, it’s a good time to start thinking about income tax. There is a bit of administrative work required for income tax filing, even before obtaining your T4 from your employer. Some things that I like to get out of the way are:
- Print off my brokerage statements for the year;
- Gather receipts for childcare, children fitness programs , arts programs, charitable donations, prescription drugs, dentist visits; and,
- Print off interest statements from my investment loan.
For more information, here is a comprehensive article about the information required to file income taxes. If you are a small business owner, or own rental properties, here is an article that may help.
Those are my 5 checklist items to start the year. What tips do you have?If you would like to read more articles like this, you can sign up for my free newsletter service below (we will not spam you).