6 things to prepare for your 2025 taxes

If you want to start the new year off right, the last thing you need is for year-end tax stress to be hanging over your head. So before popping the champagne bottles, make sure you’re on top of the important tax deadlines and are looking at ways to reduce the amount of tax you might owe.

Here are a few things to consider before tax season rolls around.

Optimize your RRSPs and RRIFs.

Maximizing your Registered Retirement Savings Plan (RRSP) contributions can make a big difference in the income tax you’ll pay throughout your life. RRSP contributions are tax-deductible, meaning any contributions you make before the deadline on March 2, 2026, are subtracted from your 2025 taxable income.

Best of all, since most people pay taxes throughout the year via payroll withholdings, your RRSP contributions will reduce your taxable income and you could receive a refund (which you can then use to get a jump start on your RRSP contributions for 2026).

If you turned 71 in 2025, this is the last year you can contribute to your RRSP before it must be withdrawn or converted to a Registered Retirement Income Fund (RRIF). If you have a RRIF, you’ll want to think carefully about how you withdraw money, because withdrawals are taxable. An advisor can help.

Contribute to the RESP.

The Registered Education Savings Plan (RESP) is a great way to help you save for the ever-increasing costs of post-secondary education. The money you contribute to an RESP isn’t tax-deductible, but it grows tax-deferred until it’s withdrawn for eligible expenses, at which point the money will be taxed in the hands of your child, who will likely be in a lower tax bracket than you.

The big benefit of an RESP is the Canada Education Savings Grant (CESG), which is essentially free money. When you contribute to an RESP, you’ll receive a matching grant of 20% on the first $2,500 you contribute each year, up to $500 per year and a lifetime maximum of $7,200. Ideally, you want to contribute to the RESP by December 31, so you can get the CESG grant for 2025, but it is possible to receive grants from missed years. The maximum CESG the government will pay in a given year is $1,000.

Use an FHSA to build for the future.

If you’re planning to buy or build a home relatively soon, you might want to open a First Home Savings Account (FHSA) before the end of the calendar year, so you’ll have two years’ worth of contribution room in January.

Similar to RRSPs, FHSAs, which launched in April 2023 to help first-time homebuyers, are tax-deductible, meaning any money you contribute before December 31 will be deducted from your taxable income for 2025.

You can contribute up to $8,000 toward an FHSA every year (up to a lifetime limit of $40,000), and any unused contribution room in a given year can be carried forward to future years. However, only $8,000 carries forward in any one year. The maximum contribution in a single year is $16,000.

Consider capital gains and losses.

If you invest in a non-registered account, consider whether you want to realize any capital gains or losses before the end of the year. A capital gain is the increase in value of an investment between the time you buy and when you sell. A capital loss is the decrease in value between buying and selling.

If you realize a capital gain, one-half of the gain is taxable. You can potentially offset the taxable capital gain by selling an investment that’s in a loss position, triggering a capital loss. The merits of an investment should be prioritized, but you’ll also want to consider the tax impact.

Try not to slip up.

Make your life easier by getting organized well ahead of tax time. Whenever you receive an important receipt or tax slip, put it somewhere you can easily access it, if needed. This includes slips you receive from employers (T4s), those you receive from financial institutions (such as the T5, T3 and T5008) and receipts for any charitable donations you’ve made.

You’ll also want to hang on to any receipts you receive for a range of possible tax deductions available in Canada, including out-of-pocket medical expenses, moving expenses or home office expenses. If you’re not sure whether something can be claimed on your taxes, file it away for later, just in case.

Key tax deadlines you won’t want to miss

December 31, 2025 – This is the last day to contribute to your Registered Education Savings Plan (RESP) to receive a government grant for 2025, make a Tax-Free Savings Account (TFSA) withdrawal in time to get the contribution room back in the new year and contribute to your First Home Savings Account (FHSA) to receive a 2025 tax deduction.

This is also the deadline to make a charitable donation that you want to claim on your 2025 taxes. If you plan to give money but don’t need the credit this year, it can be carried forward (and combined with subsequent donations) for five years.

Note that only qualified donees can issue official donation receipts for gifts received.

March 2, 2026 – This is the last day to contribute to your Registered Retirement Savings Plan (RRSP) for a 2025 tax deduction. Note: if you turn 71 in 2025, your final contribution must be made by December 31, 2025.

April 30, 2026 – This is the deadline to file your tax return, unless you or your spouse or common-law partner is self-employed. This is also the deadline to pay any taxes you owe.

June 15, 2026 – This is the deadline to file your tax return if you or your spouse or common-law partner is self-employed. Note: Any money owing must be paid by April 30, 2026.