Act Now, and Save on Your 2010 Taxes

As the final weeks of 2010 draw to a close, most of us are focused on holiday activities.  To ensure a fresh start to your 2011, now is the time to implement year-end tax strategies.  A quick review can uncover opportunities for you to keep more tax dollars in your own pocket. 

Here is a quick checklist to get you started:
 

1.       Pay items that qualify for tax breaks such as tuition fees, medical expenses, childcare fees, or child support.  Paying them before December 31 will allow you to deduct them on your 2010 income tax return.

2.       Consider triggering a capital loss for planning purposes.  Some investments in your non-registered portfolio may have been affected by the recent market fluctuations and currently sitting in a negative position.  If you sell or dispose of the investment, you can use the capital loss to offset capital gains earned in 2010, or carry them back against gains you were taxed on in any of 2009, 2008 or 2007.  You can also carry the loss forward as a cushion against future capital gains – you can carry a loss forward indefinitely.

3.       Make political or charitable donations before the end of December and get the tax credit for this year.

4.       Top up RESP and RDSP contributions before December 31^st as carry forward amounts are limited and you may miss out on Government Grants and/or Bonds.

A little preparation now can help reduce your tax bill and improve the performance of your investment portfolio.  It’s a good idea to speak with me; or your tax specialist before the end of the year about your tax and financial strategies.  If you don’t, you may end up paying more in taxes than you have to.

Have a great weekend,

Tracey

Source; Mackenzie Financial Corporation