The last few months of the year are your final window to make tax moves that reduce what you owe for the current tax year. Once December 31 passes, most opportunities are locked — with the notable exception of RRSP contributions, which you have until early March to make. Whether you are looking at tax-loss harvesting from your investment portfolio, making strategic charitable donations, or simply ensuring you have contributed enough to your RESP for the full government match, a small amount of planning in November and December can save you hundreds or thousands of dollars.
Year-End Tax Planning Timeline
The key thing to understand is that different strategies have different deadlines. Tax-loss harvesting, charitable donations, and TFSA withdrawals must all happen by December 31. RRSP contributions get an extra 60 days into the new year. Plan accordingly — December tends to get busy, and you do not want to miss a deadline because you ran out of time.
| Deadline | Action |
|---|---|
| November | Review capital gains/losses; plan tax-loss harvesting |
| November-December | Make charitable donations |
| December 15 | Final tax instalment payment due |
| December 31 | Tax-loss harvesting trades must settle |
| December 31 | Charitable donations must be received by charity |
| December 31 | TFSA withdrawals (room restored Jan 1) |
| December 31 | Medical expenses (12-month period) |
| December 31 | RESP contributions (for current-year CESG) |
| December 31 | Child turns 71: final RRSP contribution year |
| January 1 | New TFSA contribution room available |
| March 3, 2027 | RRSP contribution deadline for 2026 tax year |
RRSP Strategies
Your RRSP contribution is the most impactful tax-reduction tool available to most Canadians. Every dollar you contribute reduces your taxable income dollar-for-dollar, and the tax savings increase as your income rises. If you are in a high tax bracket and have unused contribution room from prior years, a catch-up contribution — even funded by a short-term loan — can produce a large refund that pays off the loan immediately.
| Strategy | Details | Tax Savings |
|---|---|---|
| Maximize RRSP contribution | Contribute up to your limit (check on CRA My Account) | 20-53% refund depending on bracket |
| Catch-up contributions | Use unused room from prior years | Same |
| Spousal RRSP | Contribute to spouse’s RRSP using your room | Income splitting in retirement |
| RRSP loan | Borrow to maximize contribution; repay with refund | Net benefit if refund covers loan |
| Employer RRSP matching | Ensure you’ve maximized employer match | 100% instant return |
RRSP Contribution Impact
The table below shows exactly how much a $10,000 RRSP contribution is worth at different income levels in Ontario. At $220,000 of income, the same $10,000 contribution saves nearly $5,000 in combined taxes. This is why financial planners often recommend deferring RRSP deductions to higher-income years if you expect your income to rise significantly.
| Income | Marginal Rate (Ontario) | Contribute $10,000 | Tax Refund |
|---|---|---|---|
| $55,000 | 29.65% | $10,000 | $2,965 |
| $80,000 | 31.48% | $10,000 | $3,148 |
| $110,000 | 33.89% | $10,000 | $3,389 |
| $160,000 | 43.41% | $10,000 | $4,341 |
| $220,000 | 48.35% | $10,000 | $4,835 |
Tax-Loss Harvesting
Tax-loss harvesting is one of the most overlooked year-end strategies. If you hold investments that have dropped in value, selling them before December 31 lets you use those losses to offset capital gains you realized during the year. The critical rule to know is the superficial loss rule: if you buy back the same or an identical investment within 30 days before or after selling, the CRA denies the loss entirely. A common workaround is to sell one ETF and immediately buy a similar (but not identical) one to stay invested.
| Step | Details |
|---|---|
| 1. Review portfolio | Identify investments with unrealized losses |
| 2. Calculate gains | Add up capital gains realized in 2026 |
| 3. Sell losing investments | Before December 31 (allowing trade settlement) |
| 4. Offset gains | Losses reduce taxable capital gains |
| 5. Carry forward unused losses | Can carry back 3 years or forward indefinitely |
| 6. Superficial loss rule | Cannot rebuy same or identical investment within 30 days |
Example
This example shows how harvesting a $10,000 loss against a $15,000 gain saves $2,250 in taxes. Without harvesting, you would pay tax on the full $15,000 gain — with it, only $5,000 is taxable. If your losses exceed your gains, the unused losses can be carried back three years to recover previously paid taxes or carried forward indefinitely.
| Transaction | Amount |
|---|---|
| Capital gain from selling stock A | $15,000 |
| Capital loss from selling stock B | -$10,000 |
| Net capital gain | $5,000 |
| Taxable capital gain (50% inclusion) | $2,500 |
| Tax at 30% marginal rate | $750 |
| Savings vs no harvesting | $2,250 less tax |
Charitable Donation Strategies
Charitable donations offer some of the most generous tax treatment in the Canadian system. The federal credit is 15% on the first $200 donated, then jumps to 29-33% on everything above that. If you donate appreciated securities (stocks or ETFs) directly to a charity instead of selling them first, you avoid the capital gains tax entirely and still get the full donation receipt. This can be worth thousands of dollars on investments with large unrealized gains.
| Strategy | How It Works | Benefit |
|---|---|---|
| Donate appreciated securities | Transfer stocks/ETFs directly to charity | No capital gains tax + full donation receipt |
| Bunch donations | Combine 2-3 years of donations into 1 year | More of donation at 29-33% rate (over $200) |
| Corporate donations | Donate through corporation | Deduction against business income |
| Donor-advised fund | Large contribution now, distribute over time | Immediate tax receipt, ongoing giving |
Donation Tax Credit Rates
| Donation Amount | Federal Credit | Provincial Credit (Ontario) | Combined |
|---|---|---|---|
| First $200 | 15% | 5.05% | 20.05% |
| Over $200 (income under $235K) | 29% | 11.16% | 40.16% |
| Over $200 (income over $235K) | 33% | 11.16% | 44.16% |
TFSA Year-End Moves
The TFSA has a unique withdrawal rule that creates a year-end planning opportunity. Any amount you withdraw before December 31 gets added back to your contribution room on January 1 of the following year. However, if you withdraw and re-contribute in the same calendar year, the CRA treats the re-contribution as a new contribution — which means you could accidentally over-contribute and face a 1% monthly penalty on the excess. If you need funds temporarily, either withdraw and wait until January to put it back, or do not withdraw at all.
| Action | Details |
|---|---|
| Withdraw before Dec 31 | Room restored on January 1 |
| Do NOT withdraw and re-contribute same year | Causes over-contribution (1%/month penalty) |
| Contribute new $7,000 room on January 1 | Sets up tax-free growth for the full year |
| Max out TFSA if possible | Room is cumulative ($95,000+ if eligible since 2009) |
| Review TFSA investments | Rebalance if needed |
Income Splitting Strategies
Income splitting is one of the most effective ways for couples to reduce their combined tax bill. Because Canada’s tax system is progressive, a couple where one person earns $150,000 and the other earns $30,000 pays significantly more tax than a couple where both earn $90,000 — even though the household total is the same. The strategies below are all CRA-compliant ways to shift income toward the lower-earning spouse.
| Strategy | Who Can Use It | Details |
|---|---|---|
| Spousal RRSP | Higher-earning spouse | Contribute to spouse’s RRSP; deduct from your income |
| Pension income splitting | 65+ with eligible pension | Split up to 50% with spouse |
| CPP sharing | Both 60+ | Equalize CPP payments |
| TFSA gifts | Any couple | Give spouse money to contribute to their TFSA |
| Family RESP | Parents | Both parents can contribute; income taxed in child’s hands |
| Prescribed rate loans | High/low income couples | Lend at CRA prescribed rate for investment |
Medical Expenses
Medical expenses are one of the most under-claimed deductions in Canada. The CRA allows you to claim expenses over a flexible 12-month period ending in the tax year — it does not have to be January to December. If you had a major dental procedure in April and expensive prescriptions in November, pick the 12-month window that captures the most expenses. The lower-income spouse should typically claim medical expenses because the threshold (3% of net income) is lower.
| Rule | Details |
|---|---|
| Claim period | Any 12-month period ending in the tax year |
| Threshold | Lesser of 3% of net income or ~$2,759 (2025) |
| Lower-income spouse should claim | Lower threshold = more deductible |
| Common expenses | Dental, prescriptions, glasses, physiotherapy, fertility, travel for medical care |
| Private health premiums | Eligible (if not employer-paid) |
RESP Contributions
If you have children, contributing $2,500 per child per year to an RESP earns the maximum $500 Canada Education Savings Grant — a guaranteed 20% return on your money from the federal government. If you have unused CESG room from previous years, you can contribute up to $5,000 per child to earn $1,000 in CESG. December 31 is the deadline for current-year matching.
| Action | Details |
|---|---|
| Annual contribution for CESG | Contribute $2,500/child to receive $500 CESG (20% match) |
| Catch-up room | Government matches up to $1,000 CESG/year (on $5,000 contribution) |
| Deadline | December 31 for current-year CESG |
| Lifetime CESG | Up to $7,200 per child |
Business/Self-Employed Year-End
Self-employed Canadians have more flexibility in timing income and expenses. If you expect to be in the same or lower tax bracket next year, deferring revenue into January and pulling expenses into December can meaningfully shift your taxable income. The immediate expensing rules allow you to write off up to $1.5 million in eligible capital property in the year of purchase.
| Action | Details |
|---|---|
| Defer revenue | If possible, delay invoicing until January |
| Accelerate expenses | Buy business equipment/supplies before Dec 31 |
| Immediate expensing | Up to $1.5M in eligible property (CCA) |
| Home office deduction | Calculate square footage percentage |
| Vehicle log | Complete your mileage log for the year |
| Pay salary to family members | If incorporated, reasonable salary to spouse/children |
Complete Year-End Checklist
Use this checklist to make sure you have covered every angle before the year closes. Print it, check each box, and your future self will thank you at tax time.
| ☐ | Action | Deadline |
|---|---|---|
| ☐ | Review RRSP contribution room (CRA My Account) | Before March 3 |
| ☐ | Maximize RRSP contributions | March 3, 2027 |
| ☐ | Review portfolio for tax-loss harvesting | December 31 |
| ☐ | Make charitable donations | December 31 |
| ☐ | TFSA withdrawal planning | December 31 |
| ☐ | RESP contribution ($2,500/child) | December 31 |
| ☐ | Gather medical expense receipts | December 31 |
| ☐ | Review employment expenses (T2200) | December 31 |
| ☐ | Pay tax instalments | December 15 |
| ☐ | Review insurance beneficiaries | Year-end |
| ☐ | Update estate plan if needed | Year-end |
| ☐ | Business: defer revenue, accelerate expenses | December 31 |
| ☐ | Organize all receipts and documents | Before filing |
| ☐ | Book appointment with accountant | January-February |
The Bottom Line
Year-end tax planning is not about finding loopholes — it is about making sure you are not leaving money on the table. The combination of maximizing your RRSP contribution, harvesting investment losses, making strategic charitable donations, and ensuring your TFSA and RESP room is fully utilized can save a typical Canadian household $2,000-$10,000 or more in taxes each year. Start in November, work through the checklist, and finish before the holiday rush takes over.
Related Reading
- Complete Canadian Tax Guide for Beginners 2026 | How Taxes Work
- CCPC Tax Planning Guide for Canadian Business Owners in 2026
- Tax Deadline Canada 2026 | When to File Your Taxes
→ Back to: Complete Canadian Tax Guide