Tip of the week
December 2019
If you plan to take a deduction for vehicle expenses in 2019, either because you are an employee or a business owner, you need a mileage log. Today, after your car tires have moved for the last time, take a picture of your odometer reading. The phone you always have in your hand can be used to take the picture that will provide some credibility to your mileage log. This picture will be dated proof of your odometer reading at the end of 2019.
If you are a business owner, it is also likely that today is the last day of your taxation year. If you have inventory it should be counted today. You don’t have to cost it today, but you do have to count it before there is any business activity in January.
Are there any other year-end things you should be doing today? Do you have a checklist from last year? Once your year-end duties are done it will be time to enjoy the last evening of 2019.
This tip is coming out on the day before Christmas, which is likely not a time for any more tax or financial management tips. I would like to wish everyone who listened to our tips this year a happy holiday season. Whatever your faith or beliefs, the next couple of days are a pause in the ordinary hustle and bustle of the year. Take some time to relax and connect with family and friends. Everyone deserves a break.
There is limited time left in 2019. Here are a couple of last minute things that could help reduce your taxes in 2019.
If you have shares that are not in a TFSA or RRSP, then you may want to sell the losers to reduce the capital gains that you have already earned in 2019. If you are going to sell shares in 2019 you need to do that pretty soon as many businesses grind to a halt by the 20th. This concept is called tax loss harvesting, if you want to impress your broker when you call.
Charitable donations need to be made before the 31st if they are going to count for 2019. If you have enough medical to claim this year, you might consider getting your prescriptions filled by the end of the year. If you have plans to reduce your 2019 taxes you need to implement them immediately.
Did you pay all of your personal income tax installments so far this year? December 15this the last installment for the 2019 taxation year, for individuals.
You know what CRA has asked you to pay, and by now you should have a pretty good idea of how much money you made. The December installment should be the amount of money you need to send to the Receiver General to bring your installment up to the amount CRA asked for, or the amount that you expect to owe for personal income tax, whichever is less.
Consider your installments because we all pay enough income tax and you should avoid paying interest to CRA when you can.