Getting a Head Start on Year-End to-Dos

With several financial deadlines and holiday planning, the first two or three weeks of December can be busy and challenging.

You can reduce end-of-year stress by starting early with any of these registered plan strategies.

TFSA. If you plan to make a Tax-Free Savings Account (TFSA) withdrawal in the near future, consider the timing. Withdraw funds by the end of the year, and you can replenish them anytime in 2027. But if you wait until the new year to make a withdrawal, you will only regain the contribution room in 2028.

RESP. If you have a Registered Education Savings Plan (RESP), you can receive $500 in Canada Education Savings Grant (CESG) funds for each beneficiary, plus $250 for Quebec residents through the Quebec Education Savings Incentive (QESI), on your first $2,500 in annual contributions made by December 31. You can also catch up on any unused grant room from previous years, with an annual maximum of $1,000 in CESG and $500 in QESI funds.

If you’re in the withdrawal stage, you can determine whether you’re able to receive taxable education assistance payments without the student paying tax. Will your child’s income for the year be less than the basic personal exemption plus other tax credits? If so, you could take the difference in education assistance payments before December 31 tax-free.

FHSA. If you or a family member has a First Home Savings Account (FHSA), a contribution made by year-end can be claimed as a deduction on this year’s tax return. Also, if you plan to open an FHSA in the near future, opening it by December 31 gives you $8,000 in participation room, even if you contribute that amount next year.