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Financial Checklist to Start the Year (2015)





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

Investors rejoice!  For 2015, TFSA accounts get $5,500 in contribution room ($36,500 total since 2009).  If you made a withdrawal in 2014, then this year, you can contribute up to $5,500 plus the 2014 withdrawal amount.  Find out how much TFSA contribution room you have here.

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 2014, 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 2. 2015) can be claimed for either 2014 or 2015 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 2015 taxes in late winter 2016.  Also, now is a good a time as any to re-balance some of those holdings.

5. Prepare for filing 2014 Taxes

With 2014 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 T5 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?





10 Comments, Comment or Ping

  1. Excellent list, thanks for keeping it top of mind!

  2. 2. Tyler Tran

    Hey FT
    Quick question.

    Let’s say I wanna contribute 15 000 to my rrsp for 2014 however im still in the first 60 days of the year.

    Would that be okay? or do I have to wait till after March 1 2014 to contribute for 2014?

  3. Hey Tyler, yes you can elect to claim the tax deduction either 2013 tax year or 2014 tax year. For me, I keep it simple by waiting until after the RRSP deadline to contribute for the next year.

  4. 4. Ed Rempel

    Tyler & FT,

    Actually, you can delay deducting your RRSP contribution as long as you want. As long as you have the contribution room, you can contribute and delay claiming the deduction.

    We find this useful when you don’t know exactly what your taxable income would be. For example, you can contribute a larger amount (assuming you have room) and then when you do your tax return, you can deduct the exact amount that brings your income to the bottom of your tax bracket. Delay deducting the rest until the next year.

    This strategy gets you the maximum possible refund for your contribution.

    Ed

  5. 5. Bad Caleb

    Hey FT, what’s stopping you from moving your RESP from TD e-series to another discount brokerage. Is it the transfer fee? I have been thinking of doing the same but BMO Investorline requires 25K min before waiving annual admin fees and I’m not quite there yet.

  6. @Bad Caleb, I have thought about it, but I don’t have any real incentive to move from TD right now. The TD e-Series product is easy to use and fairly cost efficient. Although Questrade is probably a good bet for RESP as they provide commission free ETFs on the buy side. You have me thinking now. :)

  7. For 2015, 1, 2, and 5 are now complete!

  8. MDM,

    Thanks for providing the link about being able to determine your TFSA contribution room for 2015. I have been busy completing number 4 on your list and this information will come in handy.

    Good luck throughout 2015 and keep the great content coming!

    Mr. Captain Cash

  9. Don’t forget to check all your insurance needs, they may have changed.

    Also a good time to ask for lower premiums!

    Great tips,
    Mark

  10. Great Tips! I love the TFSA room and can’t wait to get some of tax back.

    BeSmartRich

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