2025 Year-End Tax Planning Checklist: How to Save Taxes and Increase Refunds in Canada
As 2025 comes to a close, taking a few proactive steps before December 31 can significantly reduce taxes, increase refunds, and unlock valuable credits. Below is a practical year-end tax checklist for individuals, families, and business owners.
1. Maximize RRSP Contributions
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RRSP contributions made by December 31, 2025 (or up to March 3, 2026, for deduction flexibility) can reduce taxable income for 2025.
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Consider spousal RRSPs to split income and reduce future retirement taxes.
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High-income earners benefit the most at marginal tax rates above 40%.
2. Use TFSA Room Strategically
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Any unused TFSA contribution room should be used before year-end.
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TFSA withdrawals are tax-free and do not affect government benefits like OAS or GIS.
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Ideal for emergency funds or short-term investing.
3. Harvest Capital Losses
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Sell underperforming investments before December 31 to offset capital gains realized in 2025 or carried back to prior years.
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Ensure transactions settle by year-end (T+2 rule).
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Avoid superficial loss rules by not repurchasing the same security within 30 days.
4. Claim All Eligible Credits & Deductions
Commonly missed items include:
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Medical expenses (including travel and attendant care)
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Disability Tax Credit (DTC) and retroactive claims
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Tuition, student loan interest, and caregiver credits
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Charitable donations (donation splitting may optimize credits)
5. Review Employment & Work-From-Home Deductions
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Employees required to work from home may claim eligible expenses (Form T2200/T2200S).
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Self-employed individuals should review home-office, vehicle, and professional expenses.
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Ensure mileage logs and receipts are up to date.
6. Small Business & Corporation Planning
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Pay bonuses before year-end (or accrue properly) to deduct in 2025.
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Review shareholder remuneration mix (salary vs dividends).
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Consider timing of asset purchases to maximize CCA.
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Track capital dividend account (CDA) and RDTOH balances.
7. Family Income Splitting Opportunities
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Pension income splitting for seniors.
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Prescribed-rate loans (where applicable).
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RESP contributions to maximize CESG grants.
8. Check Government Benefits & Credits
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Ensure tax filings are up to date to avoid benefit disruptions.
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Credits tied to income include CCB, GST/HST credit, Ontario Trillium Benefit, and carbon rebates.
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Even low-income or no-income individuals should file.
Final Tip
Tax savings are best achieved before the year ends — not after filing season begins. A short review in December can result in thousands of dollars in savings.
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