Year end tax planning is upon us again. This year we are providing a link into the PriceWaterhouseCoopers web site, where you'll find a Tax Memo document (Acrobat .PDF format) that sports a Year End Tax Planning Checklist, a list of tax deadlines throughout the upcoming year along with useful charts and tables highlighting both provincial and federal tax rates.

The Tax planner breaks its information into 6 specialty sections, each dealing with a type of tax payer, individual and/or business owner. If you're an investor or tax payer with international connections, you'll be provided with tips and warnings identifying potential problems. The concerns of seniors and students are treated separately much the same way parents and/or spouses are provided with their own unique reminders. It prints out at eight pages and is worth the time and paper to do so.

A quick review.

For the month of December 2003, remember to pay deductible or creditable fees, expenses and dues by Dec 31, including such items as alimony and maintenance payments, child care expenses. If you have moved because of work or education, then that expense may be deductible. Medical expenses and in some circumstances, legal fees can be claimed. Don't forget any investment expenses or investment counsel fees, safekeeping or box rental fees and certain tuition fees are also considered an expense.

Special Consideration at age 69

If you turned 69 this year make sure that you make any eligible RRSP contributions well before the end of the year, as you must convert your RRSPs to RRIFs by December 31, 2003. The other thing you can do if you have utilized all of your RRSP contribution room is over-contribute to your RRSP by the amount of any RRSP contribution room you would have created for 2004 based on your earned income for 2003. You will have a 1% penalty on the over-contribution for December but the savings from the RRSP deduction in 2004 will substantially outweigh this. You can still deduct the RRSP contribution in 2004 even though you converted to a RRIF in 2003. If you are over 69 but have a spouse age 69 or less you can also make a spousal RRSP contribution in her/his name based on any contribution room you have for this year.

You and CCRA

If you have an outstanding balance at CCRA, the final tax installment date is Dec 15th. December 24, 2003 is the final trading day on Canadian stock exchanges for 2003 settlement and also is the final day for tax-loss selling for 2003.

If you're thinking of making a spousal contribution consider making it in December instead of waiting for February. Spousal RRSPs are governed by what's called the "3 year rule." If the spouse takes funds out of the RRSP in the same year the contribution was made or within the following two calendar years, the withdrawal will be attributed back to (and taxed in the hands of) the contributor. By contributing in December rather than in January or February, your spouse will be able to withdraw the money a year earlier.

Other considerations if you are actively involved and have considerable mutual funds within your portfolio.

Buying mutual funds this month?

If the investments are outside of an registered product you may be faced with additional taxation as a result of year-end distributions. Read More:

• Look out - large mutual fund year end payout
• Understanding the art of maximizing After Tax Returns, not Pre Tax Returns

Selling Mutual Funds this month?

Investors who wish to engage in tax-loss selling to ensure that the capital loss is realized in 2003 need to do so and have the trade dated by December 24th 2003 or earlier.

For those investors who hold mutual funds outside their RRSP the following links may help you understand and aid in calculating the Adjusted Cost Base (ACB) for end of year tax purposes. Read More:

• Calculating the Adjusted Cost Base
• Making a switch to Mutual Funds
• Tax Planning tips - Mutual Funds
• Death and Taxes

Important Notice: Information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or viewed or that it will continue to be accurate in the future. No one should act upon such information without the appropriate professional advice after a through examination of the particular situation.

* * *

Use this link to load a printer-friendly version of this document.

Have a question regarding this article? Use our feedback form to send us a note.

© , Fiscal Agents Money Management Newsletter
25 Lakeshore Road, Oakville, On L6K 1C6.
(905) 844-7700

Knowledge Bank Money Centre Learning Centre Financial Tools Newsletter Products & Services Radar Screen About Us Legal | Site Map | Home | Search Information on supported Internet Browsers Mutual Fund Investments - Statutory Sales Disclosure Information Copyright © 1984 - Fiscal Agents Financial Services Group Questions? Comments? Use our Feedback page to contact us.