7 – 2024 Year End Personal Tax Planning Tips
What We Covered (starts at 00:01 mins)
- Importance of preparing for 2024 year-end tax planning, including evaluating your financial position in a tax-efficient way.
- Emphasis on remaining in control of your banking system while optimizing your tax strategies.
- Reminder: You can’t avoid taxes entirely, but you can legally minimize them.
Key Focus Areas (starts at 02:30 mins)
- Admin logistics & selecting the right tax professional (03:02 mins)
- Not just form fillers, must give strategic advice.
- Seek value-based professionals over lowest cost.
- Common deductions & deadlines:
- TFSA deadline: December 31, 2024 ($7,000) (04:20 mins)
- RRSP contribution deadline: March 1, 2025 (04:28 mins)
- Spousal RRSPs: Use income splitting to manage tax brackets within the family (05:05 mins)
Principal Residence Exemption (starts at 06:20 mins)
- You must disclose your principal residence every year.
- Failure to properly file can jeopardize the exemption.
- Watch for “flipping rules”: selling within 12 months can lead to income tax treatment, not capital gains.
RRSP Considerations (starts at 08:09 mins)
- Be mindful of:
- Contribution limits
- Pension adjustments
- Over-contributions → penalties
- Strategic advice:
- High-income earners often don’t benefit from RRSPs.
- Plan a “RRSP melt” strategy during low-income years (09:51–10:25 mins)
Net Worth Audits (starts at 11:30 mins)
- CRA is increasing audits to find unreported income.
- Definition: A net worth audit compares lifestyle vs. reported income.
- Prepare by keeping detailed records; these audits are invasive and imprecise
- Engage an audit-experienced professional, not necessarily your regular tax filer (14:16 mins)
Final Encouragement (starts at 15:00 mins)
- Build a team of professionals to proactively manage tax and wealth.
- Use your coach and tax advisor as partners in risk reduction, not just compliance.
- Meet regularly to review complex transactions and avoid pitfalls.