Canadian investors needs a few reminders when it comes to keeping track of tax deadlines, according to a survey released today by Toronto-based BMO Nesbitt Burns Inc.
Survey results show that only 24% of Canadians think about tax return-related issues before the end of year, while 50% wait until the new year to consider tax issues. Another 35% of people leave all thought of taxes to the last minute just before the April deadline.
As such, advisors need to pick up the phone and talk to clients about their investment-related taxes and remind them of approaching deadlines, according to John Waters, vice president, head of tax and estate planning, BMO Nesbitt Burns. Waters suggests making those phone calls in November instead of during the busy month of December.
In addition to not thinking about taxes generally, most Canadians are not aware of the exact deadline for some income tax issues. For example, 68% of respondents to BMO’s study were unaware of the charitable donations and tax credit/deduction deadline. Seventy-five percent of participants did not know the registered retirement savings plan (RRSP) contribution deadline for people turning 71 years of ago, while 83% were unaware of the tax-free savings account withdrawal deadline. All three tax issues have a December 31st deadline.
As well, 82% of survey participants did not know that December 15 is the deadlines for the payment of quarterly tax installments while 90% were unaware that the deadline for tax-loss selling is December 24.
The tax-loss selling strategy in particular offers advisors an opportunity to talk with clients about their portfolios. “It’s a good excuse to call and say, hey, this is how things have gone this year,” says Waters. The conversation can then easily be turned towards taxes and how clients can make the most of their investments while reducing their tax bill.