With the end of the 2011 calendar year a mere few weeks away, we thought it would be an opportune time to remind our clients of some deadlines which are fast approaching. Here are some of the more important ones:
RRSP to RRIF Conversions
If you turn 71 in 2011, you must convert your RRSP to a RRIF by December 31, 2011. Furthermore, if you want to make one last RRSP contribution, you must do so by December 31, 2011; you don’t get the extra 60 days like you do in all other years.
Charitable Donations
If you wish to claim charitable donations on your 2011 income tax return, you must make the contribution by December 31, 2011.
RESPs
You must make RESP contributions by December 31, 2011 if you wish to maximize your entitlement to the government grant for 2011.
Lump Sum Mortgage Payments
Most mortgage contracts allow you to make an annual lump sum payment on your mortgage, most often being between 10% and 20% of your original loan. This is normally a calendar year deadline so it’s fast approaching.
Personal Income Tax Insallments
The last personal income tax installment deadline is December 15, 2011.
Corporate Payroll Remittances
The deadline for the last calendar 2011 corporate payroll remittance is January 15, 2012. Note the deadline is January 10, 2012 if your average monthly withholding amount is over $15,000.
Tax-Loss Selling (orders in by December 23rd)
If you sell securities at a loss, yo ucan use this loss to offset any capital gains made earlier in 2011, or the three previous tax years (I.e. 2010, 2009, 2008). This means yo ucan use this loss to either save taxes in 2011, or recover previously paid taxes in the last three years. Alternatively, you can carry forward capital losses indefinitely to offset capital gains made in the future. December 31st falls on a Saturday this year. Security transactions normally take 3 business days to settle, meaning if you put your order in on Wednesday the 28th, it will not actually take place until January 3rd. Since Monday the 26th and Tuesday the 27th are stat holidays, it is imperative to get any sell orders in by December 23rd at the very latest. If you don’t, you will lose the ability to recover capital gains taxes paid in 2008.
Where possible, defer income until 2012
If you have a choice about timing of income late in the calendar year, defer receiving the income until January of 2012. That way, you effectively get a 12 month deferral on paying the income taxes on the income.
Common examples of items which could be deferred until January of 2012 are:
- Selling stock with ineherent capital gains
- Lump sum withdrawals from RRSP or RRIF
- Lump sum dividends from your corporation