Working with a financial advisor can help you make the most of financial opportunities.Getty Images
As the end of the year approaches, it’s an ideal time to consider tax planning opportunities that could benefit you and your family.
From charitable giving to optimizing registered plans, there are several smart moves you may be able to take advantage of before Dec. 31. But as Jamie Golombek, managing director, tax and estate planning, CIBC Private Wealth, points out, “You don’t have to do this alone. This stuff is complicated, and you should rely on professionals.”
Whether you consult with an accountant, a lawyer, a tax advisor or a financial advisor at CIBC, expert guidance can help you make the most of these opportunities. Here are Mr. Golombek’s top tips for year-end planning:
Income splitting: Take advantage of lower prescribed rates
One strategy to consider is income splitting, which can help reduce your overall family tax burden, especially when rates are favourable. “Maybe you’re going to set up what’s called a prescribed rate loan and loan money to a lower-income family member or even to kids using a family trust,” Mr. Golombek says. “Now that the prescribed rate has dropped to 3 per cent, this is a new opportunity that you might want to consider going forward, even to 2026.”
Turning losses into gains: Tax-loss selling
“One of the most common things that we talk about before the end of every year is tax-loss selling, which is the opportunity to realize a capital loss that you might have in a non-registered portfolio and then use that loss to offset any other capital gains that you realized this year, or in the prior three years,” says Mr. Golombek. This strategy can offer a valuable refund if you’ve paid taxes on gains in the last three years.
Donate now, save later
Charitable giving is top of mind for many Canadians as the year wraps up. “You must make a donation by Dec. 31 to get a donation credit for the current year,” Mr. Golombek says. “However, it’s even better if you have appreciated securities,” which are stocks, bonds or mutual funds that have increased in value since they were purchased. Making an in-kind donation of appreciated securities to a registered charity means “the entire capital gains tax is erased on [that] donation.” This can be a win-win for both your tax bill and the causes you care about.
Make the most of your RESP withdrawals
When it comes to saving for education, Mr. Golombek points out that many people focus on contributions to RESPs (registered education savings plans) but overlook the best way to withdraw funds. “If the students are currently attending school, there’s an opportunity to optimize those withdrawals by taking advantage of all their personal credits, including the basic personal amount and their tuition credits.”
Reviewing a student’s expected income and credits for 2025 can help you withdraw RESP funds in the most tax-efficient way.
First home savings account: Start building contribution room
For those saving for a first home, the FHSA (first home savings account) offers a new opportunity for tax-free growth. “You can put in $8,000 for a year, to a maximum of $40,000 during your lifetime,” Mr. Golombek explains. “The money is generally tax deductible when you contribute and, for up to 15 years, grows completely tax sheltered. And if you make a qualifying home purchase within 15 years, the money comes out tax free.”
Even if you don’t make a contribution right away, simply opening an FHSA before Dec. 31 will give you $8,000 of contribution room for 2025, which you can use either this year or in the future.
Apply for a reduction of tax at source
Many Canadians look forward to their tax refund, but Mr. Golombek cautions that a refund means “you’ve effectively loaned your money to the government interest free.” If you have deductions or credits your employer isn’t aware of, such as RRSP contributions or charitable donations, you can apply to the Canada Revenue Agency (CRA) for a reduction of tax at source.
“If the CRA approves that, you can then get a letter that you can give to your employer’s HR department, which will authorize them to reduce the amount of tax they take off from your regular paycheque, essentially getting your tax refund throughout the entire year instead of waiting until the following April,” he says.
Access expert resources
CIBC offers extensive resources to help guide your tax planning. “The CIBC tax and estate planning team has prepared almost 100 publications that are available online,” Mr. Golombek says. Visit cibc.com and look under Smart Advice for the Tax Tips section, where you will find the 2025 Tax Toolkit and more.
Partner with professionals
As you consider your year-end tax strategies, remember Mr. Golombek’s advice: “You don’t have to do this alone.” Working with a CIBC advisor, alongside a tax expert, lawyer and accountant, can help you navigate the complexities of tax planning and make the most of your financial opportunities.
While there are important steps to take as the year closes, Mr. Golombek emphasizes that “tax planning should be a year-round affair.” Staying proactive throughout the year – not just at year-end – can help you maximize your options, avoid last-minute stress and respond to changes in your financial situation or tax laws as they arise.
Ready to maximize your tax savings and make confident financial decisions before Dec. 31? Don’t leave your year-end planning to chance. Book a meeting with a CIBC advisor today.
This article is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice. Individual circumstances vary; consult your advisor and a qualified tax expert for advice tailored to your needs.
Advertising feature produced by CIBC. The Globe’s editorial department was not involved.