want to save money make sure you do these things before December 31st hey guys it's Adrian here the
Canadian in a T-shirt and today I'll break down the must-do steps before the end of the year to
minimize your tax bill and maximize your money we only have 2 weeks to prepare for the new year so
let's jump in starting with the fhsa the brand new first Home Savings Account it's designed to help
Canadians buy their first home and it combines the best benefits of both the tfsa and the rrsp all
the money you put into the fhsa is tax deductible it lowers your tax bill just like the rrsp and
that money is invested and eventually withdrawn tax-free like the tfsa it's a total game changer so
please take advantage of it and this is important make sure you open your fhsa before December 31st
unlike the other tax sheltered accounts with the fhsa you only start building contribution room
once you actually open an account so open the account even if you don't put a lot of money in
into it at least you'll be gaining that $8,000 of contribution room every single year until
you reach the lifetime Max of $40,000 as long as you open an fhsa account by December 31st
that $8,000 of unused contribution room for 2023 will be carried forward so on January
1st 2024 you'll have a total of $16,000 worth of fhsa room instead if you wait until January
to open your account you miss out you'll only be able to contribute 8,000 for the year don't
make this mistake remember you can keep the fhsa account open for up to 15 years even if buying
a house is not on your radar 15 years is a long time so if there's a good chance that you'll buy
a house in the next 15 years please open an fhsa account before December 31st and you don't have
to Max it out with $8,000 contribute what you can whatever you put in will give you flexibility with
your taxes if you contribute $1,000 into your fhsa before December 31st now you get a choice
you can either claim that $1,000 tax deduction against your 2023 income to lower your tax bill
or you can carry it forward to a future year and collect even bigger tax savings if you expect your
income to grow you can carry forward this fhsa deduction the exact same way as an RSP deduction
I have a whole video breaking down this strategy check it out a lot of the banks still don't offer
fhsa accounts so I recommend opening an account with Questrade my favorite broker Questrade
was the only institution ready for the FHSA on day one and you only need $250 to open an FHSA
account with them watch this for a step-by-step tutorial on how to open an account and all the
rules to follow and make sure you use my referral link below to get that $50 sign up bonus up next
we have the RESP the registered education savings plan this is another tax sheltered
account to help fund your child's post-secondary education college and university is more expensive
than ever so investing in the RESP can make a huge difference especially with the free grant
money from the government here's how it works whatever money you put into your child's RESP
the government will match 20% of that in Grants up to $500 every year that's free money so take
it here's the strategy try your best to contribute $2,500 per child every year into the RESP that way
you'll earn the maximum $500 of free money every year keep that up and after 14 years you'll reach
the lifetime Max of $7,200 of Grants don't miss out on this free money so it's important to make
this $2,500 contribution by December 31st if you miss a year or can't contribute the full
2500 that's okay you can catch up on these grants but only one year at a time meaning if you have
unused grant money you can put in up to $5,000 into the RESP and collect up to $1,000 in Grants
but this should only be used as a backup plan if you miss a year the best approach is to put
in 2500 per child every single year but do that before December 31st that way you're guaranteed
to collect that $500 Grant if you wait until January you miss out for the year and you might
not get those grants back there are a lot more rules to cover in fact I have two entire videos
called RESP explained so give them a watch I'll put the link down below next we have the tfsa the
tax-free savings account this is by far the most flexible account there aren't any strict deadlines
for tfsa contributions if you don't max out your tfsa that unused room gets carried forward so it
doesn't really matter whether you contribute in December or January what does matter is when you
withdraw from your tfsa that timing is very important if you need the money and you know
you're going to withdraw from your tfsa it's best to do it before December 31st here's why when you
withdraw from your TFSA you can't put that money back for the rest of the year but whatever amount
you withdraw you regain that contribution room on January 1st let's say my TFSA is maxed out and
I need to withdraw $2,000 for the rest of the year my TFSA is still maxed out I can't put in
a single dollar until January if I withdraw in December I only have to wait a few short weeks
and then on January 1st I regain that $2,000 of contribution room plus the $7,000 of new
tfsa room that everyone gets for the new year instead if I wait until January to withdraw
that money I'll need to wait an extra 12 months until next year to regain that contribution room
here's the bottom line December is the best time to withdraw from your TFSA January is the worst
so if you need to withdraw do it before December 31st the rrsp the registered retirement Savings
Plan has a different schedule it doesn't follow the calendar year January to December instead
the RSP calendar starts on March 1st this means that any RSP contributions in the first 60 days
of the New Year count towards your previous year that's a good thing this way we gain an extra 2
2 months to run the numbers and make a plan to lower our tax bill if you had a high income in
2023 you can contribute to your RSP by February 29th and that deduction will lower your tax bill
so you'll receive a tax refund when you file your tax return in April you don't have to contribute
to your RSP and if you do you don't have to claim that tax deduction right away if you'll
be in a higher tax bracket next year you can carry forward that tax deduction and enjoy even more tax
savings watch my RRSP guide for more great tips just keep in mind the RRSP deadline since 2024 is
a leap year the deadline is February 29th any contributions after March 1st will go towards
your 2024 tax year and for all of these deadlines please don't wait until the last day contributions
and withdrawals can take one or two business days to process so plan ahead for that make
sure you watch my year-end tax saving tips it's a 15minute video full of important strategies that
I use every year in December to minimize my taxes I break down tax loss harvesting that's basically
when you intentionally sell a stock at a loss to reduce your tax bill The Superficial loss
rule transferring between tax sheltered accounts and more this will be my last video for 2023 so
thanks everyone and I'll see you guys next year on the Canadian in a t-shirt bye guys