As we have finished the 2016 tax year end on December 31, here are some tax tips you might want to consider to help reduce your 2016 taxes:

Charitable Donations

The last day you can make a donation and receive a tax receipt is December 31st. Lots of charities accept online donations and offer electronic tax receipts. In general, charitable donations over $200 result in tax savings at the highest marginal rate.

For Families with Children

This is the last year to claim education and textbook credits. They are being eliminated January 1, 2017. The tuition fee amount will remain in tact.

This is also the last year you can claim two popular federal credits for your children’s activities. If you don’t think you’ll spend enough to maximise these credits this year, perhaps consider prepaying these expenses for 2017. For example, if you are planning on enrolling your child in hockey or music lessons in 2017, pay for the activities by December 31, 2016 and you can claim the credit(s).

Registered Retirement Savings Plan (RRSP)

The RRSP deadline for contributions is on March 1, 2017 which means you have about three months left to contribute for the 2016 tax year. However, if the beneficiary of the plan turned 71 in 2016, they must contribute by December 31, 2016. If you’ve contributed the maximum amount in previous years, your 2016 contribution room is limited to 18% of your 2015 income (with a maximum contribution of $25,370), excluding any pension adjustments. Your 2015 Notice of Assessment will confirm your RRSP contribution room and avoid over-contributing penalties.

Tax Free Savings Account (TFSA) Contribution:

While there are no deadlines to contribute to your TFSA and no tax deduction it’s a savings option that is tax sheltered. Any income earned in a TFSA is never taxed even when it’s withdrawn. The contribution limit for 2016 is $5,500. If you haven’t previously contributed to a TFSA, you can contribute up to $46,500 this year, as long as you are at least 18-years-old and have been a resident of Canada since 2009.