The Big Easy - Three Year-end Tax Planning Tips - October 2005

The end of the year will be here before you know it. Fall is a good time to review your financial situation with your Rice Financial advisor and plan for your 2005 income tax return.

In the rush to get income tax returns filed many people miss out on tax-saving opportunities. Here are three often overlooked tax planning tips for you to discuss with your Rice Financial advisor.

Top Up Your RRSP
Contributing to an RRSP is one of the most beneficial ways to increase your tax savings - 90% of Canadians do not top up their RRSP contribution room. This fall consider gifting an RRSP to your family members. Not only will you receive tax savings, you will also defer taxation on the earnings within the plan.

Your RRSPs are for more than just retirement. If you are planning on returning back to school or wanting to buy a home, your RRSPs can be a source of financing.

RRSP contributions can also increase refundable tax credits based on family net income like the child tax benefit

File Income Tax Returns For Your Children Under 18
File an income tax return for children under 18 who have little or no income. This ensures your child will receive a GST rebate in the first quarter after the child turns 19.

The child will also accumulate RRSP contribution room on earned income sources. This can help maximize non-refundable tax credit provisions.

Remember you can file retrospective tax returns under CCRA's Fairness Provisions policy.

See If Tax Loss/Gain Selling Is To Your Advantage
Work with your tax consultant before this December to see if tax loss/tax gain selling makes sense for you.

You can book losses on stocks and other securities to offset capital gains in the year while carrying back losses to recover taxes paid in prior years.

Remember in order to apply tax loss/tax gain for 2005 you will need to do it before December 23.

Talk to your Rice Financial representative for more information.