As the end of the year comes into view, you should get in touch with your clients to remind them about certain financial activities with a deadline of Dec. 31.

These yearend financial planning moves that can result in cost savings or deferred taxes, and by bringing them up and ensuring action is taken, you can enhance the value of your services to clients. Here’s a look at some of those moves:

> Tax-Loss Selling. It’s time to look through the portfolio and cull the deadwood that is unlikely to reignite. Losses on securities that have dropped in value can be applied against the gains on those that have risen, thereby reducing overall taxable capital gains.

What makes this tax-loss selling strategy attractive is that once losses have been applied against this year’s realized gains, any unused losses can by carried back and applied against any net realized gains incurred during the past three years. These unused losses can also be carried forward indefinitely and applied against future gains to reduce taxable income.

Keep in mind that it takes three business days for a trade to settle. So, it’s probably wise to do any tax-loss selling by Dec. 24, before clients head off for the holidays.

This strategy can be applied to a variety of capital holdings, including stocks, bonds, exchange-traded funds, mutual funds and real estate investments other than your clients’ personal residences. Tax-loss selling makes sense only for investments held outside of registered plans such as RRSPs or RRIFs.

“If a client is holding on to anything that has missed the recovery of the past several months,” says Jim Yih, a financial consultant with Edmonton-based Retirement Think Box, “maybe now is the time to get rid of it and use the loss to apply against any capital gains.”

> RESPs. Clients need to make contributions to their children’s RESPs by Dec. 31 to qualify for grants for 2009. The federal government offers a 20% Canada education savings grant, to a maximum of $500 per child on the first $2,500 of contributions. Higher grants are available for families with incomes of less than $38,832.

> Income-Splitting With A Spouse. If a client is contributing to a spousal RRSP, it’s better to make the contribution before Dec. 31 than to wait for the official RRSP deadline of March 1, 2010.

If money is withdrawn from a spousal RRSP or RRIF in the same year the contribution was made, or within the following two calendar years, the income received will be attributed to the higher-income spouse who made the contribution, not the lower-income RRSP owner. By contributing late in 2009, the three-year clock on attribution rules gets started one year earlier than it would by waiting until early 2010.

“By contributing in late 2009, the client can essentially knock a year off,” says Dean Paley, a senior financial planning specialist with Edward Jones in Mississauga, Ont. “It’s best to keep the waiting period as short as possible, in case something comes up that requires money to be withdrawn. A difference of one day can add an entire year.”

> Pension Income Credit. Clients who are more than 65 years old can take advantage of the $2,000 pension income tax credit. If clients do not have any pension income, they can transfer $2,000 from an RRSP to a RRIF, then immediately withdraw $2,000 from the RRIF and call it pension income.

Because this is tax-free income, your clients should withdraw it even if it’s not needed. The pension income tax credit is non-refundable and may not be carried forward each year.

In other words: use it or lose it.

The withdrawn funds can always be invested in a tax-free savings account to take advantage of continued tax-free, compounded growth. Paley says some financial services institutions will allow a client to open a RRIF for one month in December, simply for this purpose. Alternatively, your client could transfer $14,000 to a RRIF now and withdraw $2,000 each year up until age 71, when their entire RRSP must be converted to a RRIF or annuity.

> Charitable Donations. These must be made before Dec. 31 to be deductible in the 2009 taxation year. Keep in mind that clients could make gifts of publicly traded securities to a charitable organization and not have to pay taxes on any capital gains. At the same time, clients would receive a tax credit for the full amount of the donation. If securities are being donated to a charity, do so by Dec. 24 to allow for trade settlement to take place by yearend.

@page_break@> Finish Home Renovations. The federal home renovation tax credit offers Canadians a 15% tax credit for eligible renovation expenses. The credit applies to any amounts spent in excess of $1,000, up to a maximum of $10,000, producing a maximum credit of $1,350. The credit expires after Feb. 1, 2010.

Although some things are best done by yearend, others are best deferred until 2010.

For example, investors in mutual funds held outside an RRSP frequently receive a distribution of interest, dividends and or capital gains at yearend, which is taxable. It’s best to wait until early 2010 to buy into the fund to avoid the distribution.

In addition, if clients are planning to withdraw the allowable $25,000 from an RRSP under the Homebuyers’ Plan to help finance a house ($50,000 per couple), they should wait until 2010 to make the withdrawal. Withdrawals must be repaid over a 15-year period, beginning the second year after the withdrawal. If the withdrawal is made in 2010, repayment does not have to begin until 2012.

The purchase of guaranteed investment certificates should also be deferred until early 2010, as interest is typically paid on the anniversary date of purchase and is fully taxable outside registered plans. If the GIC is purchased now, interest would be taxable in 2010; if clients wait until January, they will receive the interest one month later and can defer the taxes by one year. IE