With the end of the year soon approaching, tax planning issues should be top of mind for most of your clients.

“[But] while it is always prudent to plan ahead, many individuals do not begin to think about taxes until deadlines are in sight,” says Prem Malik, chartered accountant and financial advisor with Queensbury Securities Inc. in Toronto.

Here are some things you should make your clients aware of before Dec. 31 if they have not been engaged in tax planning actively throughout the year:

> RRSP Conversions. If any of your clients turned 71 years old during 2010, they must convert their RRSPs into either a RRIF or an annuity on or before Dec. 31. If they fail to do so, they must collapse their RRSP and pay taxes on the fair market value of the plan’s assets.

These clients also have until Dec. 31 to make their last RRSP contributions — “Not until March 1, 2011” as other contributors do, advises Jamie Golombek, managing director of tax and estate planning with Toronto-based Canadian Imperial Bank of Commerce’s private wealth-management division.

>  RESP Contributions. Your clients should make a contribution to their children’s or grandchildren’s registered education savings plans before Dec. 31 to be eligible for the 2010 Canada education savings grant, which is equal to 20% of the first $2,500 in contributions they make to an RESP in each eligible year.

More important, if any of your clients has a child or grandchild who turned 15 in 2010 and has never been a beneficiary of an RESP, Dec. 31 will be the “last chance” for that teen’s RESP to be eligible for the CESG in 2011 and 2012, says Golombek: “If they miss the deadline, the child or grandchild will not be eligible for any grants in the future.”

> TFSA Withdrawals. If any of your clients wish to make a withdrawal from their tax-free savings account to pay down debt or make an RRSP contribution, they should do so before the end of the year, advises Malik.

Ideally, this works best for clients who have made tax-free gains in their TFSA accounts, he says. They can reduce their debt-servicing costs or get an RRSP tax deduction, or both.

Also, the amount withdrawn will then be added to their 2011 TFSA contribution limit. For example, if a $5,000 investment grew to $8,000 in 2010, the client could withdraw the entire amount before Dec. 31, and be able to re-contribute the $8,000 plus his or her annual $5,000 limit for 2011.

> Tax-Loss Selling. Your clients should consider selling investments with accrued losses to offset any capital gains realized in the current year. In addition, losses may also be used to offset gains that were made in the previous three years.

In order to benefit from any losses, trades must settle before Dec. 31, which means that they must be made on or before Dec. 24.@page_break@> Investment Mix Review. You should review your clients’ portfolios to determine the optimal mix to get the best after-tax returns, says Jason Safar, partner in the tax services practice with PricewaterhouseCoopers LLP in Mississauga, Ont.

That’s because each type of investment income is taxed differently: interest income is taxed at the client’s marginal tax rate; dividend income benefits from the dividend tax credit; and taxes are applied to only 50% of capital gains.

Essentially, Safer says, you want to determine which investments are more suitable for a client’s RRSP vs his or her non-registered account.

> Charitable Donations. Your clients must make charitable donations on or before Dec. 31 to get a tax receipt for the current year. They can benefit from donating publicly traded securities with accrued capital gains to a registered charity, which will provide the donor with a tax receipt equivalent to the fair market value of the securities while also eliminating any capital gains.

The larger the capital gains, says Safar, the more beneficial this strategy is for your clients.

> Investment Expenses. If your clients want the ability to deduct any investment-related expenses — such as interest on money borrowed to invest, professional accounting fees, investment-counselling fees for non-registered accounts or safety deposit box fees — on their 2010 tax returns, such expenses must be paid before Dec. 31.

> Investing In Flow-Through Shares. Clients who wish to invest in flow-through limited partnerships of mining and oil and gas companies — the shares in which are 100% tax-deductible and which may also offer additional provincial and federal investment tax credits — must do so before the end of the year.

These shares, which are similar to common shares, are issued by either eligible private or publicly traded junior resources companies engaged in exploration activities. The tax credits are applied directly to reduce taxes payable in a manner similar to RRSP contributions.

> RDSPcontributions. If any of your clients are eligible for the annual government disability tax credit, they must make their contributions to their registered disability savings plan before Dec. 31 to qualify.

An RDSP is a tax-deferred savings plan in which up to $200,000 can be invested, with no annual contribution limits. Contributions are not tax-deductible, but growth within the plan is tax-deferred. The federal government will contribute a maximum of $3,500 as a Canada disability savings grant and $1,000 in Canada disability savings bonds annually to an RDSP. IE