2023 Year-end Tax Planning Opportunities
Introduction
The rapid rise of inflation is forcing everyone to pay more attention to managing their finances to find cost savings wherever possible. Maximizing tax savings opportunities is only one part of an overall financial strategy, but can significantly impact wealth building in the current tax year and the years to follow. Legislative proposals to increase taxes on high-income individuals and certain trusts in the form of alternative minimum tax (AMT) are also introducing complexities into the personal tax planning equation. The new AMT proposals will be effective starting in 2024 if passed into law. The information contained in this document is accurate at the time of writing (October 2023), and the Canadian government may revise current proposals and introduce new tax measures before the end of the year.
Despite the uncertainty of future tax policies, taxpayers can take actions based on the alternative minimum tax proposals before the federal government finalizes them for 2024. With deadlines fast approaching, now is the time to take advantage of tax-deferred growth opportunities, tax-advantaged investment strategies, and charitable-giving opportunities, among others, to maximize deductions and credits for your tax situation. Reviewing your investments in light of your goals, the tax policy environment, and the economic landscape can help you and your advisor see where adjustments need to be made to position yourself for 2024 and beyond.
Important Dates to Remember
| December 2023 | 15 | Fourth quarter tax instalment payment for 2023 due. |
| 27 | Last day to sell securities on Canadian markets to realize a gain or loss. Settlement is T+2 days. |
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| 27 | Last day to sell securities on U.S. markets to realize a gain or loss. Settlement is T+2 days. | |
| 31 | Last day to pay investment loan interest to deduct in 2023. | |
| 31 | Last day to complete charitable contributions for 2023. Allow enough time to complete donations that may require additional lead time, such as securities donations. |
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| 31 | Last day to pay childcare, medical, and tuition expenses to claim deduction or credit on the 2023 T1. |
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| 31 | Annual tax instalment payment for 2023 due for farming and fishing income. | |
| January 2024 | 30 | Must pay prescribed rate loan interest by this date to maintain income splitting. |
| February 2024 | 29 | Deadline for employers to report T4/T5 to CRA. |
| 29 | Deadline for employers to send T4 receipts to individuals. | |
| 29 | Deadline to contribute to a Registered Retirement Savings Plan to claim as a 2023 deduction. | |
| March 2024 | 15 | First quarter tax instalment payment for 2024 due. |
| 30 | T3 trust tax return deadline for trusts with a December 31 year-end. |
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| 31 | Deadline for paying balance owing for Form T1-OVP if you made excess RRSP contributions in 2023. |
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| April 2024 | 30 | Deadline to pay your 2023 taxes and file your 2023 Individual T1 tax return. |
| June 2024 |
17 | Deadline to file your 2023 Individual T1 tax return if you or your spouse earned self- employment income. Tax payment deadline remains April 30, 2024. |
| 17 | Second quarter tax instalment payment for 2024 due. | |
| 30 | Deadline to file your TFSA return RC243 and pay taxes if you made excess contributions in 2023. |
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| September 2024 | 16 | Third quarter tax instalment payment for 2024 due. |
| October 2024 | 1 | Last day to buy or build your qualifying home if you made a Home Buyers’ Plan withdrawal from your RRSP in 2023. |
