Year End Tax Planning 2017

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As 2017 is nearing its end, in addition to holiday planning it is important to focus on year end tax planning for 2017.

Below, our accountants and business advisors offer some year end tax planning advice with a list of CRA tax deadlines for 2017 that need to be met before the end of the year or shortly thereafter.

Tax Filing Deadline on or before December 31, 2017

• Determine dividend/salary mix for owner-manager and other family members.

Consider the following:

• The salary/dividend mix depends on each recipient’s marginal tax rates, plus the desire to make RRSP contributions, and utilization of tax credits such as the child care tax credit.
• Salary payments to family members must be reasonable and the remittance of payroll taxes must be made on time.
• Approximately $50,000 of eligible dividends can be received by an adult family member with little or no tax if that family member has no other sources of income.
• Dividends may need to be paid to avoid certain attribution rules.
• Make donations of cash or shares.
  • Donations of public company shares with inherent gains are very tax efficient. The capital gain is not taxable and the amount donated is equal to the value of the shares at the time of the donation.
• Make political contributions.
• Pay for medical expenses.
• Purchase and use capital assets if the business year end is December 31, 2017.
• Distribute income from family trusts to beneficiaries.
• Consider selling capital assets with inherent capital losses if large capital gains were realized in 2017.
• Maximize TFSA contributions.
• Make RRSP contributions if an individual turns 71 in 2017 and is required to wind up their RRSP.
• Payment of tax installments.

Tax Filing Deadline on or before January 3, 2018

• Payment of interest on low interest (1%) loans from non-arm’s length parties and employers.

Tax Filing Deadline on or before March 1, 2018

• Make RRSP contributions.

For assistance with business or corporate year-end tax planning, contact the Manning Elliott Tax team at 604-714-3600 before it’s too late!

The above content is believed to be accurate as of the date of posting. Canadian Tax laws are complex and are subject to frequent changes. Professional tax advice should be sought before implementing any tax planning. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained therein.