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Financial Checklist to Start the Year (2014)





Similar to the end of the year, 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!  On January 1, TFSA contribution room grows.  For 2014, TFSA accounts get $5,500 in contribution room ($31,000 total).  If you made a withdrawal in 2013, then this year, you can contribute up to $5,500 plus the 2013 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.

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 2013, 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 3. 2014) can be claimed for either 2013 or 2014 tax year.

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 2014 taxes in late winter 2015.  Also, now is a good a time as any to re-balance some of those holdings.

5. Prepare for filing 2013 Taxes

With 2013 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?





4 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

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