As the year winds down, there’s one more kind of cleanup worth doing your taxes.
A few smart moves now can mean significant savings at tax time and a smoother filing season next spring. The key is timing: what you do before December 31 often determines how much you’ll owe later.
Below are three simple, proven strategies that can help you hold on to more of what you’ve earned, all while keeping your tax situation tidy and stress-free.
1. Make Your RRSP Work for You
A well-timed RRSP contribution is one of the easiest, most effective ways to reduce your taxable income.
Every dollar you contribute goes toward your future and lowers your tax bill today.
Here’s how it works:
If you contribute $5,000 before the February 2026 RRSP deadline, you could save up to $2,000 in taxes, depending on your income bracket.
For example, someone earning $80,000 a year could see roughly $1,500 in tax savings, while someone earning $100,000 might save closer to $1,900.
💡 Pro Tip: If you expect your income to drop next year, maybe you’re taking time off, or your business will earn less, consider contributing now while you’re in a higher tax bracket. The deduction will be worth more.
You can also carry forward unused RRSP contribution room from previous years. Many Canadians overlook this, missing out on a valuable opportunity to catch up on retirement savings while also lowering their taxes.
Finally, if you have both RRSP and TFSA accounts, it’s often worth reviewing your contribution strategy with your accountant before year-end. The right balance can help you minimize taxes now and keep more tax-free growth later.
2. Give Back (and Get Something in Return)
Charitable donations are more than acts of kindness; they’re also powerful tax tools when timed right.
To qualify for a 2025 tax credit, your donation must be made by December 31, 2025.
Depending on your province and income level, you can receive tax credits worth up to 50% of your donation. For example, a $1,000 contribution could result in roughly $400–$500 in combined federal and provincial tax savings.
🕊️ Bonus Strategy: Donate Securities Instead of Cash
If you own publicly traded stocks or mutual funds that have increased in value, donating them directly to a registered charity can eliminate capital gains tax on the appreciation.
You’ll still receive a charitable receipt for the full market value, a double tax advantage that helps both you and your chosen cause.
Please note that your donation must be made to a registered charity recognized by the CRA, and you’ll need an official donation receipt to claim the credit.
Example:
A client donated $2,000 in appreciated stock this year. The securities had a $1,000 capital gain. By donating instead of selling, they avoided roughly $250 in capital gains tax and earned a $2,000 donation receipt, saving nearly $1,000 overall.
💡 Pro Tip: Grouping your donations within a single year can increase your overall credit rate, as the first $200 is credited at a lower rate and everything beyond that receives a higher one.
3. Don’t Overlook Medical Expenses
Many Canadians miss out on claiming medical expenses because they assume they won’t meet the CRA’s threshold.
But when you combine all eligible costs for your family, especially on the lower-income spouse’s return, you might qualify for a meaningful deduction.
Medical expenses can encompass more than just doctor visits and prescriptions. You can also claim:
- Dental and orthodontic work which was not covered by insurance
- Medical travel (if treatment was over 40 km away)
- Prescribed devices like hearing aids, braces, or medical equipment
- Health insurance premiums (if paid personally)
If your household has had a year of higher health spending, braces, glasses, therapy, or treatments, it’s worth reviewing your receipts before December 31.
You can claim any 12 months ending in the tax year, so timing your expenses can help you meet the threshold more easily.
Example:
Suppose your family earned $60,000 and spent $3,000 on medical costs. The CRA allows you to claim expenses exceeding the lesser of $2,635 or 3% of net income, so that you could deduct about $365 in this example. While that may seem small, combined with other credits, it adds up to meaningful savings.
💡 Pro Tip: If you’re self-employed, some health plan premiums can also be deducted as a business expense. That’s a great way to reduce taxable income while maintaining coverage.
Timing Is Everything
The difference between saving money and overpaying the CRA often comes down to when you take action.
RRSP contributions, charitable donations, and medical expenses all depend on year-end deadlines, and the CRA won’t backdate your intentions.
Setting aside an hour this month to review your situation with a professional can make a noticeable difference when you file.
Ready to Keep More of What’s Yours?
Don’t leave money on the table this year.
👉 Book a Year-End Tax Review to make sure every dollar is working in your favour.
We’ll walk through your situation, highlight deductions you might be missing, and help you plan for 2026.
💬 Referral Reminder
Do you know someone who could benefit from this kind of clarity?
Refer them to INDep Accounting and get 5% off your next return once they become a client.
Because good advice — and good results — are worth sharing.
