Year-End Tax Planning Checklist
As the end of the year approaches, many people turn their attention to income tax planning. Individuals are taxed on a calendar year basis so December 31, 2007 represents the last date for transactions that affect 2007 taxes. There are other “tax deadlines” that fall around this time or early in the new year, such as the Registered Retirement Savings Plan (RRSP) contribution deadline. Therefore, the year-end is generally a good time to take stock of your income and deductions and to make decisions about your overall tax position for 2007.
Ideally, tax planning should be considered on an ongoing basis throughout the year as part of an overall financial plan. All taxpayers should review their particular situation regularly to ensure that they’ve structured their financial affairs to minimize tax as much as possible. In particular, any major transactions should be examined in advance to ensure that tax considerations are taken into account.
However, even if you haven’t actively monitored your tax situation throughout the year, there are still a number of steps you can take before year-end to minimize your taxes for 2007. This edition of the Tax Factor summarizes many of these tax planning ideas. Not all of our suggestions may be appropriate for your particular situation. Others, though included as year-end points, could also apply throughout the year. Your BDO advisor can assist you in determining which of these ideas make sense for you.
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