Christmas is coming…
… and with it, all the celebrations and family time that are the most important things in life.
It’s typically a quieter time in our office. True, businesses still buy and sell things, file HST returns and pay their staff, so it never goes completely silent. But who wants to call their accountant over the holidays? Nobody. Don’t worry, I’m not offended.
Hopefully, you’ll enjoy some downtime before we all go back to work in the New Year. If I’m in the office, I try to grab a couple of days to catch up, clean up, and generally think about things. If at home, much the same. It’s also nice to knock a couple of items off your to do list.
Here are a few suggestions. These are the best sort of New Year’s resolutions. Not only are they good for you, but you can do them in an hour or less, and then ignore them for the rest of the year.
1. Pay yourself first (Yes, you’ve heard it before).
A scary number of my clients don’t make regular RRSP contributions. The reason is always the same: Whenever you remember, you always get distracted while hunting for the chequebook. Or – today, right now – isn’t a good time to lock away “X” dollars.
What to do: E-mail your investment advisor over the holidays and ask him/her to call you in January to set up a regular monthly contribution, by automatic transfer.
How much? Well, that’s not my decision (I’m not qualified to offer investment advice). But I’ll wager this: Add up what you spend each month at Starbucks, Tim Hortons, Beer Store and LCBO. Triple it and put that in. I bet you won’t notice it’s gone. And you can buy a Timmies card with the tax refund. It may not fully fund your retirement, but it’s a start.
2. Create your emergency record
Nobody wants to think about it. But, if the house burned down or you were hit by a bus, would you (or your heirs) know where all your accounts were, who you were insured with, what credit cards you have available? And the account numbers for all of these?
What to do:
- Go through your filing drawer.
- Photocopy the latest statement/ renewal for each account/ policy you hold, or grab an old one if the account details haven’t changed.
- Photocopy your passport, driver’s licence, OHIP and SIN card.
- Repeat for each household member.
- Put in a sealed envelope and write contact details for your executor, lawyer, and accountant on the front.
- Give to your mother to keep safe.
- Do the same next year.
3. Pick some low-hanging fruit.
Sorry, these are tax-related. Well, what did you expect?
As you know, the tax year ends on December 31 – for all individuals, and for many corporations too. All the big firms publish “Year-end guides for tax planning”, although many of them are broader tax planning documents, rather than what to do in December.
These guides are worth reading at some point. But they’re a little heavy for holiday reading – even if you’re trying to get some light work done. So let’s go for some easy stuff that’s good for you, applies to the average family, and helps you come April 30:
- If you have been meaning to make some charitable donations, try to do it online so you get the receipt dated before Dec 31. Worth about 20c on the dollar on this year’s tax return.
- Same if you are signing the kids up for fitness or arts activities.
- If you need to take money out of savings – say, to pay holiday bills – take it out of your Tax Free Savings Account (TFSA) in December. That way, you can put it back in 2016. If you wait to 2016 to withdraw, the headroom isn’t topped back up until 2017. [Flip side: Money taken out from RRSPs are taxable withdrawals. Push these withdrawals back to January, so they’re taxable in 2016.]
If we don’t speak before the break, we wish you a wonderful Holiday Season.