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If you’re not immediately sure of the charities you wish to support, you might consider making the gift by Dec. 31 to a donor advised fund (DAF), which is an account at a public foundation that holds your donation. You will get a tax receipt for your donation in the year that you contribute to the DAF. Each year you can recommend distributions to be made from your DAF to other registered charities.

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Take TFSA withdrawals

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Thinking about tapping into your TFSA in early 2026? If so, consider withdrawing the funds by Dec. 31. Doing so will allow you to recontribute any funds withdrawn beginning the following calendar, i.e. Jan. 1, 2026. After Dec. 31 you can’t recontribute the amount withdrawn until 2027.

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Convert a portion of your RRSP to a RRIF once you turn 65

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If you’re at least 65 but don’t have any pension income, consider transferring (on a tax-deferred basis) $14,000 (which is $2,000 per year × 7 years from age 65 to age 71) of your RRSP to a registered retirement income fund (RRIF) in the year you turn 65. You can then withdraw $2,000 annually from age 65 through age 71 to take advantage of the annual pension income credit.

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Open up a first home savings account

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If you’re a first-time home buyer who is a resident of Canada and at least 18 years of age, the first home savings account (FHSA) allows you to save on a tax-free basis toward the purchase of a home in Canada. Starting in the year that you open an FHSA, you can contribute (or transfer from RRSPs) a total of $8,000 plus any carryforward available from the previous year (for a maximum of $16,000 in any year), and up to $40,000 during your lifetime.

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If you don’t open up the FHSA you don’t accumulate the contribution room. This way you can build $8,000 of contribution room, even if you don’t make a contribution this year, which can then be carried forward to 2026, allowing you to make a $16,000 FHSA contribution next year.

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Make renovations for home accessibility

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The non-refundable home accessibility tax credit (HATC) assists seniors and those eligible for the disability tax credit with certain home renovations. The tax credit is equal to 14.5 per cent of expenses toward renovations that permit these individuals to gain access to, or to be more functional and safe within, their home. The amount of eligible expenses is $20,000, so this credit could be worth up to $2,900 in 2025.

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The HATC applies for payments made by Dec. 31 for work performed or goods acquired in 2025. Until Dec. 31 a single expenditure may qualify for both the HATC and the medical expense tax credit and both may be claimed. But as a result of changes announced in the recent federal budget, this is the last year your expense may qualify for both credits.

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Optimize tax-free RESP withdrawals for students

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If the beneficiary under a registered education savings plan (RESP) attended a post-secondary educational institution in 2025, consider having educational assistance payments (EAPs) made from the RESP before the end of the year. Although the amount of the EAP will be included in the student’s income, if the student has sufficient personal tax credits, such as the basic personal amount ($16,129), the EAP income will be effectively tax-free.

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Note that the maximum EAP that can be taken in the first 13 weeks of post-secondary education is $8,000 for full-time students and $4,000 for part-time students.

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Jamie Golombek, FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Estate Planning with CIBC Private Wealth in Toronto. Jamie.Golombek@cibc.com.

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