Now is the time to use tax credits only available until Dec. 31, says CIBC tax planner Jamie Golombek.
More than three-quarters of Canadians won’t even think about their taxes until it’s too late to realize the savings, a CIBC poll finds. As well, as many as two-thirds of Canadians are in the dark about how to reduce their 2016 tax bill.
“December 31 is the quiet deadline that many may miss in the holiday rush. As we enter the final weeks of 2016, now is a particularly good time to sit down with your advisor to see what you can do to reduce your 2016 tax bill,” Golombek says.
1. Pre-pay any 2017 Children’s Arts & Fitness Activities
There won’t be childrens’ arts or fitness tax credits in 2017, so pay for next year’s activities before Dec. 31 to take advantage of the final year of credits. This could save clients up to $250 of expenses on artistic or cultural activities and up to $500 of expenses on physical activity programs.
2. Renovate for home accessibility
The new Home Accessibility Tax Credit will permit a claim equal to 15% of up to $10,000 for renovations to assist seniors and those eligible for the disability tax credit to be more mobile or functional in their home.
3. Stock up on school supplies
The new School Supply Tax Credit will help compensate teachers and early educators for school supply expenses they incur in the year.
4. Re-balance Corporate Class Mutual Funds
Currently, switching between corporate class mutual funds isn’t taxable, but starting Jan. 1, 2017, new federal rules mean it will be. Re-balance portfolios by the end of the year to avoid triggering a taxable disposition in the new year.