As 2025 comes to a close, Canadians have valuable opportunities to reduce taxable income, take advantage of key tax credits, and set themselves up for a successful 2026. Effective year end tax planning can make a major difference in how much you owe—and how much you keep. With tax rules continuing to evolve, being proactive is more important than ever.
At SRJ Chartered Professional Accountants, we help individuals, families, business owners, and self-employed professionals navigate the complexities of tax law. Below are the most important year-end tax tips you should implement before December 31, along with expert year end tax strategies designed to help you maximize your savings for 2025 and beyond.
Why Year-End Tax Planning Matters
Many of the most effective tax moves must happen before December 31, not during tax season. This makes year-end tax planning essential for reducing taxable income, taking advantage of government incentives, preparing your books, and addressing capital gains or losses before the CRA deadline.
By implementing strategic tax tips 2025, you can smooth out your tax burden, prevent surprises in April, and improve your long-term financial picture. Whether you are an employee, investor, business owner, or freelancer, these year end tax strategies can help you close out 2025 with confidence.
1. Maximize Tax-Advantaged Contributions
RRSP Contributions
While RRSP contributions made up to March 1, 2026, count toward your 2025 return, the earlier you contribute, the more time your investments have to grow tax-deferred.
RRSPs are effective for:
- Reducing taxable income
- Income splitting with a spouse (via spousal RRSPs)
- Saving for retirement efficiently
TFSA Contributions
Unlike RRSPs, TFSA contributions do not reduce taxable income—but they allow investments to grow and be withdrawn tax-free.
Using both accounts strategically is an essential component of year end tax planning.
2. Use Registered Plans for Children and Dependants
RESP Contributions
The government contributes up to $500 per year per child via the CESG. Contributing before December 31 ensures you receive the maximum matching amount.
3. Consider Capital Gains and Losses Before December 31
One of the most popular year end tax tips is tax-loss harvesting. If you have investments that have declined in value, selling them before year-end may allow you to claim a capital loss, which can offset capital gains for 2025 or be carried forward indefinitely.
Key rules:
- Trades must settle in 2025—so don’t wait until the last week of December.
- Superficial loss rules apply if you repurchase the same or identical investment within 30 days.
If you’re wondering, “Can I still claim capital losses for 2025?”—yes, but only if you act before year-end.
4. Review Charitable Donations and Give Before December 31
Charitable donations made before year-end qualify for the 2025 donation credit:
- Federal credit of 15% on the first $200 and 29% (or 33% for high-income earners) above that
- Additional provincial credits
Donating appreciated securities can be an excellent year end tax strategy, as the capital gain is eliminated while you still receive a donation credit on the full value of the securities.
5. Prepay Expenses to Reduce Taxable Income
For self-employed individuals, prepaying certain expenses before the year ends can lower taxable income.
Common deductible expenses include:
- Office supplies
- Software subscriptions
- Utilities and internet
- Professional fees and training
Making these payments before December 31 is one of the most valuable tax tips 2025 for entrepreneurs.
6. Key Tax Decisions for Business Owners: Salary or Dividends?
If you are incorporated, one of the most important year end tax planning questions is:
“Should I take dividends or salary in 2025?”
Salary is beneficial because:
- It creates RRSP room
- It increases CPP contributions (helping future retirement income)
- It counts as earned income
While dividends are simpler to administer, they do not create RRSP room, result in CPP contributions, or create earned income.
Most business owners benefit from a mix, which is why it’s essential to consult with a CPA before year-end. SRJ CPA can help determine the optimal split based on your corporation’s income, personal goals, and tax bracket.
7. Optimize Tax Credits Before Year-End
Don’t miss valuable credits such as:
- Medical expense tax credit
- Disability tax credit
- Home accessibility credit
- Canada training credit
- Digital news subscription credit
Reviewing these in December ensures you don’t leave money on the table.
8. Year-End Tax Planning for Self-Employed Canadians
If you are self-employed, year-end tax planning is critical.
Consider the following year end tax tips:
- Track all business-related expenses and retain receipts
- Claim home office expenses (based on square footage or simplified method)
- Maximize vehicle expense deductions
- Consider buying equipment before year-end for CCA claims
- Review GST/HST obligations
- Set aside funds for income tax instalments
If you ask, “How can I optimize my taxes if I’m self-employed?”, the answer comes down to documentation, planning, and professional support—three areas where SRJ CPA excels.
9. Income Splitting Opportunities
Year-end is a good time to explore:
- Spousal RRSPs
- Prescribed rate spousal loans
- Dividend income splitting in family corporations
- Paying reasonable salaries to family members employed by your business
These strategies can significantly reduce your family’s overall tax burden.
10. Prepare for 2025 Tax Planning Now
If you’re wondering, “What should I do now to prepare for 2025 tax planning?”,
here are the essentials:
- Review your estimated 2025 taxable income
- Evaluate whether you should defer or accelerate income
- Update your financial plan and budget
- Consider incorporating if income is rising
- Review estate planning documents
- Organize and digitize receipts for a smoother tax season
The most effective tax planning happens before the year actually begins.
Frequently Asked Questions (FAQ)
What are the most important tax deadlines before the end of the year in Canada?
Key deadlines include December 31 for charitable donations, RESP contributions, tax-loss selling, and most income/expense transactions. RRSP deadlines extend until March 1, 2026.
How can I reduce my taxable income before December 31?
Popular strategies include maximizing RRSP contributions, prepaying deductible expenses, harvesting capital losses, making charitable donations, and claiming allowable credits.
Should I take dividends or salary as a business owner in 2025?
Both have advantages. Salary creates RRSP room and contributes to CPP, while dividends offer greater flexibility. The optimal choice depends on your income level and corporate structure.
What tax credits should I not miss before year-end?
Do not overlook medical expenses, disability tax credits, charitable donations, home accessibility credits, and the Canada training credit.
Can I still claim capital losses for 2025?Yes—if you sell the investment before December 31 and the trade settles in the 2025 calendar year.
Yes—if you sell the investment before December 31 and the trade settles in the 2025 calendar year.
Are TFSA and RRSP contributions both good for year-end tax planning?
Yes. RRSPs reduce taxable income, while TFSAs provide tax-free growth. Using both strategically is ideal.
How can I optimize my taxes if I’m self-employed?
Track expenses, claim home office deductions, prepay certain costs, manage GST/HST carefully, and review capital purchases.
What should I do now to prepare for 2025 tax planning?
Review financial statements, organize records, meet with a tax professional, and plan for income or expense timing.
Should I meet with a tax advisor before the year ends?
Absolutely. A tax advisor can help you implement the right year end tax strategies before deadlines pass.
How can SRJ CPA help with year-end tax planning?
SRJ CPA provides personalized year-end tax planning services including tax optimization, corporate strategies, CRA compliance, bookkeeping review, and future tax forecasting. Our team ensures you maximize deductions, minimize liabilities, and start 2026 financially prepared.
Take Control of Your 2025 Taxes with SRJ Chartered Professional Accountants
The end of the year is the perfect time to make strategic moves that can significantly reduce your tax bill. Whether you need personalized year end tax tips, help with tax strategies, or a full review of your financial situation, SRJ CPA is here to guide you.
Book your year-end tax planning consultation today and enter 2026 with confidence.