Smart Personal Tax Moves to Make Before December 31, 2025
Simple year-end tax tips for Canadians.
Taxation

The end of the year is sneaking up fast — and while December is usually full of festive plans, it’s also the perfect time to squeeze in a few smart tax-saving moves before the CRA closes the books on 2025.

Even small steps now can lower your tax bill, boost your savings, and set you up for a smoother filing season come spring. Here are a few last-minute tax tips every Canadian should consider before December 31.

1. Contribute to Your RRSP (but check your timing)

While 2025 RRSP contributions technically count until March 2, 2026, making one now helps you get ahead of the rush and may still make sense before year-end — especially if:

• You’re expecting a bonus or extra income in December.
• You want to reduce your 2025 taxable income now (rather than later).
• You’re planning to withdraw funds early in 2026 and want to manage your contribution room.

If you have extra cash available, consider a top-up contribution to maximize your 2025 tax deduction.

2. Use Up Your TFSA Room

Your Tax-Free Savings Account (TFSA) is one of the most flexible tools for growing wealth tax-free. You don’t get a deduction when you contribute, but you’ll thank yourself later — all gains and withdrawals are tax-free.

If you haven’t maxed out your TFSA for 2025, make a contribution before year-end so your money has more time to grow in 2026.

If you intend on withdrawing funds from your TFSA and then re-contributing before the end of the year, check the rules, as there are penalties for over-contributing prior to January 1 of the following year.

3. Make Charitable Donations prior to December 31

Donations made by December 31, 2025 qualify for a non-refundable tax credit on your 2025 return.

• The first $200 gets a smaller credit rate.
• Anything above that gets a bigger tax break (and it adds up fast).

Tip: Consider donating publicly traded securities — you’ll get a donation receipt and won’t owe tax on the capital gain. You can also combine two years of donations to receive the higher tax credit in the year claimed.

4. Review Capital Gains (and Losses)

If you’ve sold investments at a profit this year, you may owe capital gains tax — but you can offset that by selling underperforming investments to realize a loss before year-end.

It’s called tax-loss harvesting, and it can be a smart way to balance your portfolio and your tax bill, but remember that you can’t repurchase the same investment within 30 days or CRA will deny the loss as under the superficial loss rules.

5. Double-Check Medical Expenses and Credits

Some credits — like medical expenses or adoption fees — only count in the year they’re paid.

If you’ve been planning dental work, eye exams, or other eligible costs, paying before December 31 ensures they’re included on your 2025 return.

You can claim medical expenses for any 12-month period ending in 2025, so timing can make a big difference.

6. Review Your Income Sources

If you received dividends or other investment income this year, check whether it makes sense to defer or accelerate payments before December 31. This can help you stay in a lower tax bracket — especially if your income fluctuates year-to-year.

7. Don’t Forget Family Tax Opportunities

A few family-friendly tax strategies to consider before the year ends:

• Contribute to a RESP for your child’s education — the government matches up to 20%.
• Split income strategically (e.g., through spousal RRSPs).
• Make sure all eligible dependents are included on your CRA My Account profile.

💡 Related Reading:

• T4s, T5s, and Year-End Dividends: What Canadian Business Owners Need to Know for 2025 — perfect if you’re both an employee and a shareholder.
• Capital Gains Tax in Canada | Towler & Associates — a quick refresher on selling investments wisely.

Bottom Line

Year-end tax planning doesn’t have to be complicated — it’s about being intentional. A few proactive moves in December can make a noticeable difference when you file your 2025 return.

So, while you’re wrapping gifts and making your holiday to-do list, take a moment to wrap up your taxes too — your future self will thank you.

Disclaimer: The information in this article is general in nature. We recommend that you discuss your situation with an advisor as every person’s situation is unique.