The final weeks of the year are often packed with holiday plans, family time and festive get-togethers, leaving little room for financial tasks. While it is easy to get swept up in the season, carving out a moment now for year-end tax and investment planning can make a meaningful difference, especially for Canadian investors and their families. Here are some year-end planning items to check off your list before the December 31st deadline.
- Tax-loss selling
Sell investments in non-registered accounts that have declined in value to offset capital gains. Capital losses realized prior to year-end (Dec 30, 2025 trade deadline) can offset capital gains realized in the current year. Any unused net capital losses can be either carried back 3 years or carried forward for use in a future year.
Be mindful of the superficial loss rules. If you (or a spouse, or a company you control) sell an investment at a loss and buy back the same or identical security within 30 days before or after the sale, and still hold it at the end of that period, the loss is denied and added to the cost of the new shares. For business owners, remember that realizing losses in a corporation can reduce its Capital Dividend Account (CDA).
- Pay investment-related expenses before December 31
Pay investment-related expenses for non-registered accounts prior to December 31st. This includes investment counselling fees and interest paid on money borrowed for investing. These payments can be claimed as a tax deduction where the conditions are met.
- Review and pay medical expenses
You can claim eligible medical expenses paid in any 12-month period ending in the calendar year. Review your expenses and consider paying for flexible, higher-cost items, such as eyeglasses, before year-end to optimize your claim.
- Make charitable donations by December 31
Make charitable donations by December 31st if you want the tax credit on this year’s return. You can combine donations with your spouse or partner on one return to help maximize the credit.
If you hold publicly traded securities with significant gains, consider donating some of the shares directly to a registered charity. In many cases, this can be more tax-efficient than selling the shares and donating cash. Recent changes to the Alternative Minimum Tax (AMT) rules mean that very large gifts or more complex situations may not receive the same level of tax relief as in the past. If you are planning a sizeable donation or a gift of securities, it is a good idea to speak with your tax advisor first.
- Take advantage of tax-deferred and registered accounts
- TFSA – Contribution room opens up January 1st each year. Contribute up to your available room and note that any withdrawals made this year can be recontributed starting next year.
- RRSP – The contribution deadline for the 2025 tax year is March 2, 2026. Your Notice of Assessment confirms your contribution room.
- FHSA – If you are a first-time home buyer, you can contribute on a tax-deductible basis, $8,000 annually (lifetime maximum of $40,000). Withdrawals must be used to purchase a home, or if you choose not to purchase, funds can be transferred from your FHSA directly to your RRSP or RRIF.
- RESP – Annual contributions of $2,500 per beneficiary can provide access to the maximum grant of 20%. The lifetime grant limit is $7,200 and grants stop December 31 of the year the beneficiary turns 17.
- RDSP – These are available for Canadian residents eligible for the Disability Tax Credit. The lifetime contribution limit is $200,000, with government grants up to $3,500 and bonds up to $1,000 annually. Contributing prior to December 31st will provide access to the current year assistance.
- Home renovation credits
You may be eligible to claim up to $50,000 of eligible home renovation expenses as a credit, for example renovations that improve accessibility for seniors or persons with disabilities. Discuss with your advisor to confirm which programs apply to your situation.
- Planning for business owners
For business owners, determine the optimal mix of salary and dividends before your corporate year-end. Consider accelerating expenses before year-end to reduce taxable income, along with purchasing capital assets to claim enhanced capital cost allowance where appropriate.
Additional planning items
- Timing income and gains
If your tax rate will be lower next year, consider deferring income, such as delaying the sale of investments with gains until January. At the same time, review opportunities to harvest gains strategically for personal, corporate or trust holdings if you have unused exemptions or lower income beneficiaries.
- RRSP/RRIF planning at age 71
If you turn 71 this year, you must convert your RRSP to a RRIF before December 31st. You can still contribute to a spousal RRSP if your spouse is under 71 and you have room.
Alternatively, you can make a December contribution for 2026 and pay one month of over-contribution penalty, plus file a T1OVP return. This can be helpful in specific cases, so it is important to obtain advice before proceeding.
- CRA instalments
If CRA has requested instalments, mitigate interest by paying in line with their options and your estimated tax owing for the current year.
- RESP withdrawals while children are in school
Ensure you withdraw from an RESP while your child is in school to access CESG and investment income without penalty. Spread withdrawals over multiple years if possible, but ensure all eligible income is accessed before graduation.
No deadline, but always important
- Ensure you have up-to-date Wills and Powers of Attorney.
- Ensure your insurance coverage matches your needs.
- Ensure your savings are in line with your financial goals.
- Ensure your investment portfolio matches your needs and risk tolerance.
- Ensure you have met with your financial advisor to discuss all of the above and start the new year organized.
Smart year-end moves can save you money, provide peace of mind and set the stage for a strong start to the new year. Your Kerr advisor can help you prioritize which steps are most important for your situation, including any Ontario- or Quebec-specific considerations.
