Everyone wants to start the new year off right. To be fully prepared for a great year ahead, it’s important to first close this one on strong footing—and part of that is getting your financial life organized before the end of December. Here are seven actions for you and your practice:
- Manage the needs of your practice
If you’re a practice owner, you have a few more tasks to think about before closing the book on the current year.
- Get your finances in order – Pay off any outstanding bills and check to see what money is owing to you. Reconciling what’s left to come in and what’s still to come out will help you get organized for the year ahead.
- Run your final payroll – Be sure to remind your employees to submit any final expenses they may have incurred well before year-end.
- Pay out year-end bonuses and commissions if your practice takes part in this style of compensation.
- Back up your data – While this is something you should be doing with some regularity, it’s a great habit to do a year-end back up of your financial and patient records.
- Get a financial check up
It’s a great time to check-in with your Investment Planning Advisor at CDSPI*. A re-cap of the year and look at your financial position can help you gain clarity on where you stand, and determine what adjustments, if any, are needed to make the most of your investments. If you don’t have an advisor, call us for a complimentary review.
- Make your TFSA contribution
For 2019, the contribution deadline is December 31st and the contribution limit is $6,000. If you don’t contribute, your eligible amount is added to your contribution room and can be carried forward indefinitely. The total contribution room for someone who has never contributed since the introduction of the TFSA in 2009, is $63,500.
- Contribute to your RRSP
While the contribution deadline is February 29, 2020, it’s always a good idea to plan ahead. After all, other financial obligations will crop up in the new year, especially as holiday bills start to roll in. For 2019, your contribution will be limited to 18% of your 2018 earned income, to a maximum of $26,500. Your contribution room is tracked by the CRA, so check your Notice of Assessment for your personal contribution limit.
- Contribute to a child’s education
If you’re saving for a child or grandchild’s post-secondary education, you have until December 31st to contribute to their RESP for the current year. Not only is it a tax-deferred investment account, but the government will pay you the Canada Education Savings Grant (CESG), which is 20% on the first $2,500 you contribute annually, to a maximum of $500 per beneficiary per year. You can receive up to $7,200 in CESG per beneficiary up to age 18. There is a lifetime contribution maximum of $50,000 per child.
- If you’re turning 71, convert your RRSP to a RRIF
You have until December 31st of the year you turn 71 to close out your RRSP. Call your advisor to help you transition your plan to a Registered Retirement Income Fund (RRIF).
- Give to your favourite charity
Do you have a cause or charity that’s close to your heart? Make your charitable contribution by December 31st to claim it as a deduction on this year’s tax return.
Being organized and aware when it comes to your end-of-year finances can help you start the new year off in great financial shape. Contact your Investment Planning Advisor at CDSPI to help you take care of any – or all – of these year-end to-do’s.
* Advisory services are provided by licensed advisors at CDSPI Advisory Services Inc. Restrictions may apply to advisory services in certain jurisdictions.