“In the New Year, never forget to thank to your past years because they enabled you to reach today! Without the stairs of the past, you cannot arrive at the future!” – Mehmet Murat Ildan

Weekly Update – So Long, 2018

For the last time in 2018, we will leave you with our tax- and investment-related strategies. We compiled a list of investment, RRSP, business, and child-related planning tips to cover before the end of the year.

On behalf of all of us here at You First to you and your families, we’d like to wish you a very Happy New Year!


  • Portfolio mix. Different investments are taxed at different tax rates. If you invest in both registered and non-registered accounts, ensure your portfolio mix is optimized for tax-efficiency.
  • The amount added to the TFSA room on January 1st, 2019 will increase to $6,000, bringing the lifetime total to $63,500. Consider putting funds into your TFSA to the extent you can make contributions (or via a transfer from your non-registered account). Ensure you don’t exceed your contribution room due to the significant penalty on over-contributions. If you have authorized us for CRA access, we can confirm your TFSA limit.
  • If you were planning on withdrawing from your TFSA, do so by the end of the year. The amount you withdraw will be added to your TFSA room at the start of 2019. If you withdraw in January 2019, you won’t get the room back until January 2020.
  • If you have investments in a non-registered account in a capital loss position, consider triggering the capital loss to offset capital gains realized during the year.
  • For non-registered accounts, delay purchases until January 2019 to minimize your allocation of taxable income for 2018.


  • Any donations you want to claim on your 2018 tax return must be made by December 31, 2018.  Donations must be made to a registered charity. Contributions above $200 result in a 29% federal tax credit. Keep the donation receipts!
  • If you are a first-time donor, you can claim an additional 25% credit on up to $1,000 of donations made after March 20, 2013.  2017 is the final year in which this credit can be claimed.
  • Public transit tax credit. This credit was fully eliminated following the 2017 tax year. You do not need to keep bus passes to declare on your tax return anymore.
  • If you are over 65 with no private pension, consider withdrawing $2,000 from a RRIF account to trigger the $2,000 pension credit.
  • For seniors or those eligible for the disability tax credit (DTC), renovations to make a home accessible qualify for the non-refundable home accessibility tax credit—worth up to $1,500.


  • The deadline to make an RRSP contribution for the 2018 tax year is March 1, 2019. If you have authorized us for CRA access, we can confirm your RRSP limit, factoring in any contributions you’ve made with us. An RRSP contribution has a tax savings potential of anywhere between 20%-47.7% for BC residents.
  • If you turned 71 this year, this is the final year you can contribute to an RRSP. Consider making an RRSP contribution in December of the year you turned 71 if your income in 2017 is higher than what you expect in later years.
  • If you turned 71 this year, you must wind up your RRSP by the end of the year. For most people, this means a conversion to a RRIF account with minimum annual withdrawals starting the following year.
  • Consider withdrawing funds from your RRSP if you have low income for the year.

Self-Employment / Business / Corporations

  • The Tax On Split Income (TOSI) rules were implemented in 2018.  There is now limited ability to pay dividends to family not directly involved in the business
  • However, there are exceptions.  For example, family members who are shareholders and work in the business on average at least 20 hours per week are exempt from TOSI.  If a shareholder’s over 24 and owns at least 10% of the votes and value of the shares, then the TOSI rules don’t apply.
  • Also affecting business-owner clients are new rules for passive investment income effective for tax years after 2018, including a reduction in the small business deduction (SBD) for Canadian Controlled Private Corporations (CCPC) with passive investment income between $50,000 and $150,000. The SBD is reduced to zero at $150,000 of investment income.
  • One suggestion to reduce passive income by December 31 is to ensure you are taking enough money to maximize RRSP and TFSAs.  Income of about $147,000 at 18% results in the maximum 2019 RRSP contribution of $26,500.


  • If you have a RESP and your child has turned 17 in 2018, this is the final year of his/her grant eligibility.  If you have grant room remaining, you can contribute up to $5,000 in the final year, generating a $1,000 grant.
  • Pay child-care expenses for 2018 by December 31st, 2018 and get a receipt. Remember that boarding school and camp fees qualify for the child care deduction.
  • If your child qualifies for the disability tax credit, and if RDSP assets or income will not disqualify him/her from receiving provincial income support, consider setting up an RDSP to qualify for the Canada Disability Savings Bond (CDSB – lifetime maximum of $20,000 per child). Contributions to an RDSP qualify for the Canada Disability Savings Grant (CDSG – lifetime maximum of $70,000 per child)
  • Children’s fitness and art credit. These credits have been phased out and you won’t receive a credit for these costs on your 2018 return


This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.