Year End Financial Planning

The decorations are up.  The marketing campaigns are in full swing.  People are becoming more edgy by the day.  Yup, Christmas is coming folks.

Kidding aside, it’s a great time of year and I’m looking forward to the holidays with family and friends.  Christmas signals the end of some old and the dawn of things new.  Christmas-time (or at least beforehand) is also a good time to address some year-end tax, insurance and financial planning issues before it’s too late.  Here is what I’ve been thinking about lately.  Hopefully these suggestions help you.

Capital Gains or Losses – I sold one investment earlier this year and I need to calculate my capital gain on that transaction.  I also moved some non-registered investments into my Tax Free Savings Account.  Remember you can contribute investments “in-kind” to your TFSA but if/when you do, you are considered to have sold those investments for their fair market value and may need to pay a capital gain.

Revisiting my asset allocation and location – Preet Banerjee recently wrote something I can identify with, while asset allocation is important (the mix of stocks, bonds, real estate and other investments), investors often overlook asset location; which can be costly from a tax perspective.  With some of my investments non-registered I need to give some more thought as to how I can address this issue better in 2014.

Charitable Donations – We could probably do more before the end of this year, and will be doing so.

Small Business Income and Taxation – As you can appreciate running My Own Advisor takes some work but there are some benefits as well.  I can deduct home office expenses, online expenses and conference expenses I incurred in 2013 to run this site against blog income it earned.   Speaking of income, there are some figures I need to tabulate sooner than later.  I’ll be watching for more Tweets from this site for tax tips that might apply to me.

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 2014.  I’m not thrilled about this, but understand it, since rates are climbing across the industry.  Our term life insurance policy does not expire for a few more years but if your case is different or your needs have changed, it might be a good time to check with an insurance agent or insurance broker who can tailor an insurance program for you.

I can appreciate these things are just the tip of the iceberg for others to consider.  Parents with kids need to think about RESP contributions before December 31st (to receive government contributions) and seniors will want to ensure they have received their minimal withdrawals from Registered Retirement Income Funds (RRIFs) or other accounts by the same deadline.  Hopefully these year-end financial tips have been helpful if you haven’t considered them already and maybe more importantly, this post didn’t add more stress to your holiday season.

What year-end financial planning exercises are you undertaking?

3 Responses to "Year End Financial Planning"

  1. I always do a year end review of my finances and investments. We recently changed our mortgage payment frequency from once per month to accelerated biweekly, which we will start at the beginning of 2014. I’m also simplifying my credit card situation – I have a few so I can collect points, but I want to close one of the cards.

  2. With an in-kind contribution to a TFSA, any capital loss will be disallowed. So, it only makes sense to contribute in-kind if you have a built-up capital gain. If not, you’re better off selling the asset to capture the capital loss and then contribute cash to the TFSA.


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