Thirteen spooky reasons why December 31, not October 31 can be the most haunting day of the year for tax payers

Thirteen spooky reasons why December 31, not October 31 can be the most 
haunting day of the year for tax payers 
TORONTO, Oct. 26, 2012 /CNW/ - While October 31 can be especially scary for 
little ones, December 31 can prove downright haunting for adults if they 
haven't considered certain year-end tax planning strategies. RBC Wealth 
Management has suggestions for Canadians to ensure they take all necessary 
2012 tax planning tips into account. 
"December 31 is second only to April 30 as a crucial date in the tax planning 
calendar," said Tony Maiorino, vice-president and head, RBC Wealth Management 
Services. "Because this date represents the last day of the year that 
potential tax savings opportunities are available, you need to start planning 
now to help achieve your financial goals." 
Failing to consider the following 13 potential tax planning strategies may 
make your December 31 particularly spooky: 
For business owners: 
1. Incorporated company: If you are a business owner with an 

     incorporated company, you may find both year-end corporate income
     tax deductions and a structured retirement savings plan for

 yourself through an Individual Pension Plan (IPP).
  2. Salaries for family members: As a business owner, consider paying 

     salaries to yourself and appropriate family members before
     December 31. When used correctly, this strategy can give your
     family members earned income enabling them to make an RRSP
     contribution the following year and giving your business a tax

 deduction in the current year.
  3. Purchasing assets: If you are a business owner and intend on 

     purchasing assets for your business, e.g. computers, purchasing
     them before December 31 may allow your business to claim
     depreciation on these assets for tax purposes.
     For individuals:

  4. Prescribed rate loan to spouse: With Canada Revenue Agency (CRA)
     stating the prescribed interest rate will remain at a historical
     low of one per cent until December 31, it is an opportune time to
     consider establishing or modifying a spousal loan as a possible

 income splitting strategy.
  5. Unrealized capital gains: If you have unrealized capital gains, 

     you may want to consider deferring them until after December 31 if
     your marginal tax rate may be lower in 2013 compared to 2012. This

 could allow for any tax payments to be deferred until 2014.
  6. Tax loss selling: Are you facing a large capital gain in 2012? 

     Perhaps you sold a rental property, securities or your business.
     If so, you may wish to maximize the opportunities associated with
     selling securities that have an unrealized capital loss to help
     reduce your tax liability or obtain refunds for taxes paid in

 previous years.
  7. Charitable donation: Making a charitable donation is an excellent 

     choice for reducing the personal tax you pay. The final day to
     make contributions to a registered charity in order to claim the
     donation tax receipt on your 2012 income tax return is December
     31. However, if you plan on donating securities in-kind before
     year-end, then due to the administration involved in processing an
     in-kind donation, ensure that you start this process well in
     advance of the year-end to ensure that the in-kind donation is

 recorded as a 2012 donation.
  8. Registered Retirement Savings Plan (RRSP) Conversion: If you are 

     turning 71 in 2012, you cannot have an RRSP after December 31.
     Consider making your expected 2013 RRSP contribution in December

 before converting your RRSP.
  9. Employer Bonus: Are you receiving an employer bonus by December 
 31? Deferring it may be a wise choice for you if you are expecting 
 to be in a lower tax bracket in 2013.
 10. Registered Education Savings Plan (RESP): If you are contributing 

     to a RESP, you'll want to ensure you have contributed the maximum
     allowed in order to qualify for the 20 per cent Canada Education

 Savings Grant by December 31.
 11. Moving within Canada: If you plan to move within Canada, consider 

     that individuals pay provincial tax rates on taxable income based
     on their province of residence on December 31. Since marginal tax
     rates vary from province to province (and from 39 to 50 per cent),
     you may want to consider moving prior to December 31 if you are

 moving to a province with a lower tax rate.
 12. Quarterly payments to CRA: If you make quarterly tax installment 
 payments to the CRA, you should consider making your final payment 
 on or before December 15 to avoid late interest charges.
 13. Fees: Remember to pay all investment management fees, tuition 

     fees, safe deposit box fees, accounting and legal fees if
     deductible, childcare expenses, alimony, medical expenses and any
     business expenses by December 31 if your intent is to deduct them
     on your 2012 tax return.

All tax saving strategies should be reviewed by a qualified tax specialist 
and, where appropriate, by your investment advisor, to ensure all appropriate 
regulations, laws and individual personal considerations are taken into 

About RBC Wealth Management
RBC Wealth Management is one of the world's top 10 largest wealth managers. 
RBC Wealth Management directly serves affluent, high-net-worth and ultra high 
net worth clients in Canada, the United States, Latin America, Europe, the 
Middle East, Africa and Asia with a full suite of banking, investment, trust 
and other wealth management solutions. The business also provides asset 
management products and services directly and through RBC and third-party 
distributors to institutional and individual clients, through its RBC Global 
Asset Management business (which includes BlueBay Asset Management). RBC 
Wealth Management has more than C$562 billion of assets under administration, 
more than C$324 billion of assets under management and approximately 4,300 
financial consultants, advisors, private bankers and trust officers.

Bev MacLean, RBC Corporate Communications,, 


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CO: RBC Wealth Management
ST: Ontario

-0- Oct/26/2012 09:00 GMT

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