2019 Year-End Tax Tips for Personal Taxes

The end of the year is quickly approaching and the new year will be here before we know it!

Here are some helpful suggestions taking advantage of common tax deductions and credits for personal taxes for Canadians.

As this is not a comprehensive list, please contact OMNI should you require further discussion!

TAX SAVINGS DEADLINES

If you are planning to utilize tax deductions and/or credits on your 2019 personal income tax return, many of these payments need to be made by December 31, 2019:

- charitable* or political donations,

- medical expenses**,

- investment counsel fees and related expenses,

- spousal support payments,

- interest on student loans, and

- accounting and legal fees.

A couple of caveats...

*Charitable donations are only deductible if they are paid to a registered charity and a tax receipt is issued. Payments through the "Canada Helps" organization count. Payments through crowd-funding websites such as "GoFundMe" are NOT eligible for the donation tax credit. When in doubt, check the organization's website for their charity "RR" number.

**Medical expenses that are incurred in 2019 and not claimed in 2019 can still be deducted in 2020, provided they were incurred within a 12-month period. For example, expenses from January 2, 2019, to January 1, 2020, may be claimed in 2020.

Conditions may apply to other deductions and credits as listed above.

REGISTERED ACCOUNTS

RRSP contributions to your own or a spousal account are due by February 29, 2020, including repayments to the Home Buyer's Plan or a Lifelong Learning Plan.

If you turned 71 during 2019, your RRSP needs to be wound up by December 31, 2019, and final contributions need to be made by this date.

The 2019 TFSA contribution limit is $6,000, as long as you are 18 or over and resident in Canada. Since the program's inception in 2009, each adult resident can contribute up to $63,500 up to December 31, 2019.

Should you need to withdraw funds from your TFSA account, whether to spend or to transfer to another account, it is recommended to do the withdrawal before December 31, 2019, as the amount will be added-back to your limit as of January 1, 2020. After this date, withdrawals will not be added-back until January 1, 2021.

The Home Buyer's Plan withdrawal limit continues to be $35,000 (as effective March 19, 2019) for first-time home buyers. This limit also applies to individuals with the Disability Tax Credit, even if they are not a first-time home buyer.

FINAL NOTES

Personal tax instalments for 2019 are due by December 15, 2019. This is the time to make an additional payment if you have fallen behind during the year.

Any T1 Adjustment or Taxpayer-Relief Requests for the 2009 taxation year must be received by the Canada Revenue Agency before December 31, 2019. After this date, these requests will no longer be accepted for that year.

As always, contact OMNI with any questions!