As a public accounting firm, we prepare hundreds of personal tax returns each year, mostly in March and April. Due to the volume of returns prepared and the timing of preparing personal returns after the tax year has ended, it is often difficult to provide timely tax advice to these clients and this can generally only be done on a prospective basis. Once the calendar turns to the new year, your personal tax planning options are mostly limited to RRSP contributions.
Because of this, I recommend making an appointment with your accountant or tax professional in December to review your personal tax situation for possible tax savings solutions that can be taken advantage of before the end of the year.
For example, if you were thinking of making a charitable donation in January, it may be advisable to make the donation before the end of the calendar year to accelerate the tax credit claim. Similarly, a large medical expense that is scheduled to be incurred in January could be moved into the current calendar year to ensure a quicker recovery on your personal tax return. Or you may consider selling an investment holding with losses before the end of the year to offset capital gains from the current or previous three years.
Tax planning and strategies can be more effective when prepared in advance.