As we approach year-end, now is a good time to be thinking about potential tax strategies and charitable donations. Below are some important deadlines and charitable gifting considerations, the latter of which is brought to you by KPMG.
2016 Tax Season Deadline Dates
December 23, 2016 – Last day for Canadian and US tax loss selling
· If you want to take advantage of tax-loss selling for Canadian and U.S. listed securities, December 23 is the last day you can sell investments to have them qualify for the 2016 tax year.
December 30, 2016 – Last day for US tax loss selling for US Residents for Canadian and U.S. Securities
December 31, 2016 – Last day for RESP contributions and 2016 TFSA contributions
· The final deadline for contributions to a Registered Education Savings Plan (RESP) or Tax-Free Savings Account (TFSA) to make sure it counts for the 2016 tax year.
· Contributions received after December 30, 2016, marked for the 2016 Tax Year, will be backdated to December 30, 2016.
December 31, 2016 – 2016 charitable contributions
· The last day for making charitable donations to claim the deduction in the 2016 tax year.
March 1, 2017 – Last day for 2016 RRSP contributions
May 1, 2017 – Last day to file and pay your 2016 taxes
Making the Most of Your Charitable Gifts for 2016
As directly quoted from KPMG's TaxNewsFlash-Canada October Issue (No. 2016-48)
Canada’s tax incentives for charitable donations are designed to make it easier for you to support your favourite charities. The tax savings, starting in 2016, may be worth even more if you’re in the new top tax bracket because your income is over $200,000.
Your after-tax cost for a $1,000 cash donation in 2016 can range from $460 to $523 if you have income over $200,000, and from $500 to $563 if your income is under $200,000, depending on your province of residence, as noted below.
Remember to make your charitable gifts by December 31, 2016 if you want to claim the donation credit on your 2016 tax return.
How you structure your charitable donations can be as important as the amounts you give, both to the charity and to the donation’s after-tax cost to you.
This TaxNewsFlash-Canada discusses Canada’s tax incentives to encourage charitable donations. We also highlight a variety of ways to structure your donations to make the most of these incentives both during your lifetime and through your will.
- Gifts in Kind – donating shares and other assets
- Charitable bequests and legacies
- Gifts of life insurance – A good policy
- Donations made by Corporations
To read the full October issue, click here.
Remember, always check with a qualified tax professional before considering any tax loss selling strategies.