Year End Financial Housekeeping

The marketing campaigns are in full swing and people at work are becoming more edgy by the day.  Yup, it’s Christmas time again!

Kidding aside this is a great time of year and I’m looking forward to the holidays with family.  Christmas signals the end of some old and the birth of something new.  It’s also a great time of year to address some year end tax issues, give to charity and revisit some financial stuff before it’s too late.  Here are some year end financial housekeeping tips based on what we’ve done.

Realize capital losses – I sold one investment earlier this year because I wanted to offset some capital gains.  Regarding the capital gains, I contributed some investments “in-kind” to my TFSA in 2014.  When I did that those investments were considered sold for market value and subject to any capital gains as part of this tax year.  Selling losers can be a good tax management strategy, it can make great sense if you reported capital gains on your 2013, 2012 or 2011 tax returns since you can carry back losses up to three years to offset capital gains.

Make charitable donations – We contribute to a few charities throughout the year.  My wife and I consider ourselves very fortunate for everything we have and it’s important to us to give back.  Just a reminder you have until December 31st to make your charitable donations to qualify for the 2014 tax year.

Get your small business income and taxes organized – Running My Own Advisor takes some work but there are some benefits as well.  I’ll be looking at tallying some of the following in the next couple of months to deduct my home office expenses for the 2014 tax year:

  • Business-related meals and travel.
  • Mortgage interest.
  • A portion of the property taxes.
  • A portion of the heat, hydro and utility bills.

Look into your insurance – I recently got a letter from my home and auto insurance company that indicated my premiums for both policies are on the rise in 2015.  While this stinks those letters lit a small fire; they were a good reminder to see what discounts I could take advantage of.  So, I called my provider recently and they managed to save me over $130 in premiums next year thanks very much.

Revisit your asset allocation and locations – Asset allocation is important (the mix of stocks, bonds, real estate and other investments) but investors often overlook asset location; which can be costly from a tax perspective.  For example, I keep U.S.-listed dividend paying stocks and ETFs in my RRSP only.  Why?  U.S-dividend paying stocks and ETFs do not receive any favourable tax treatment from our Canadian government.  By keeping U.S. stocks inside my RRSP I avoid paying any withholding taxes.

Set some new financial goals – I’ll be doing this in a future post, soon, but I think it’s a great idea to revisit where you’ve been so you can figure out where you want to be in 2015.  My wife and I will be chatting about a few of our financial goals and other goals over some wine during the Christmas holidays.

What year end financial housekeeping activities are you taking on?

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

9 Responses to "Year End Financial Housekeeping"

  1. We also take the end of the year to review and adjust our spending targets for the following year.

    We have a relatively sophisticated (ok am a techie, complex) spreadsheet that we use to record expenses by date and category. We review it fairly frequently to see if we have got carried away anywhere, but the end of the year is as much a time to review spending as well as investment goals.

    It is not always “we overspent on x, must cut back”, it can also be “If we alliw ten percent more, what could we do”.

  2. Congrats on another great year you have shared with us readers. I come here every day and have learned a ton of knowledge from you and other fellow bloggers who share. Thanks again.

  3. MOA,

    There is nothing better then calling and being able to score a discount! I’m sure you’ll put that $130 you saved in insurance premiums into dividend paying stocks. Interesting about the benefits of running MOA I well have to learn more about that as I progress.

    Happy Holidays,

    Mr. Captain Cash

    1. There are lots of tax considerations running a small business. I’ve learned a bit over the years but still have a long ways to go to be any sort of DIY tax guru. I’ll leave the tough stuff to the pros.


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