REPEAT-BMO Nesbitt Burns Tax Study: Only a Quarter of Canadians Consider End-of-Year Tax Deadlines

TORONTO, ONTARIO--(Marketwired - Dec 23, 2013) - According to a study released today by BMO Nesbitt Burns, Canadians may be leaving dollars on the table by not considering key end-of-year-tax deadlines. The study found that fewer than a quarter of Canadians (24 per cent) think about income tax return-related issues prior to the end of the year, while overall, 85 per cent think about these issues by the start of the new year (50 per cent) or by the period just before the April filing deadline (35 per cent).

"Important tax deadlines occur at or before the end of the year that Canadians should be considering," said John Waters, Vice-President, Head of Tax & Estate Planning, BMO Nesbitt Burns. "The end of December marks an important time for many who are looking to minimize the amount of taxes they pay on their income this year."

Mr. Waters also noted that tax planning should be considered a year-round activity and, more generally, the end of the year is an opportune time to review and plan one's overall financial situation.

The study also found that the vast majority of Canadians (88 per cent) feel that they are familiar with income tax deadlines (compared to 93 per cent last year). However, when asked about various specific tax deadlines, many could not identify the correct dates:

• Charitable donations and tax credit/deduction deadline (68 per cent unaware of the correct date, up from 61 per cent last year).

• RRSP contribution deadline for those turning 71 (75 per cent unaware, up from 70 per cent last year).

• Payment of quarterly tax installments deadline (82 per cent unaware, up from 73 per cent last year).

• TFSA withdrawal deadline (83 per cent unaware, up from 78 per cent last year)

• Tax-loss selling deadline (90 per cent unaware, up from 85 per cent last year).

BMO Nesbitt Burns offers the following year-end tax-saving strategies:

1. Payment of Quarterly Tax Installments - Deadline: December 15*

• Individuals whose estimated income tax payable for the year, or payable for either of the two preceding years, exceeds $3,000 ($1,800 for Quebec residents) may be required to pay income tax installments. Personal tax installments are due four times a year, with the final installment due December 15.

2. Tax-loss Selling - Deadline: December 24

• If you have investments that have depreciated in value, consider selling these investments before year-end to offset capital gains realized earlier in the year to reduce your overall tax bill. It is important to ensure that a sale makes sense from an investment perspective, since stocks sold at a loss cannot be repurchased until at least 31 days after sale to be effective. Be sure to work with your BMO Nesbitt Burns advisor as well as your tax advisor in implementing this strategy.

3. Charitable Donations & Other Tax Credits/Deductions - Deadline: December 31

• Ensure all charitable donations are made before December 31, in order to receive a tax receipt for 2013.

• Instead of donating cash to charities, consider donating appreciated publicly-traded securities (this provides a tax credit and could potentially eliminate any capital gains tax on the accrued gain on the security).

• December 31 is also the final payment date for a 2013 tax deduction or credit for expenses such as childcare, medical, tuition and the recently-introduced children's fitness and arts tax credits.

4. TFSA Withdrawals - Deadline: December 31

• If you are planning a withdrawal from your Tax-Free Savings Account (TFSA), consider making this withdrawal in December instead of waiting until the New Year; a withdrawal would result in additional TFSA contribution room for the following year.

5. RRSP Contributions for those turning 71 - Deadline: December 31

• Individuals who turned 71 years of age in 2013 must collapse their RRSP by the end of the year. Such individuals should consider a final RRSP contribution, assuming any unused contribution room exists.

Regional Results:

		% who think about tax return issues before the end of the year		% who think about tax return issues by the start of the new year		% who think about tax return issues by the period just before the April deadline		% who state they are familiar with income tax deadlines
National		24		50		35		88
British Columbia		25		43		41		88
Alberta		29		46		41		87
Prairies		29		53		50		85
Ontario		22		52		37		90
Quebec		21		55		20		86
Atlantic		25		43		40		89

Further regional data is available upon request

For more information on tax efficient investing and planning locate a BMO Nesbitt Burns Investment Advisor at www.bmo.com/nesbittburns.

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* When a due date falls on a Saturday, a Sunday, or a holiday recognized by the CRA, payment will be considered on time if received the next business day.