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TORONTO, December 9, 2008 – Canadians should take action now to ensure they meet applicable year-end tax deadlines and take advantage of tax breaks, according to John Waters, tax expert with BMO Nesbitt Burns.

Waters says waiting until April to start thinking about taxes is too late because many of the cut-off dates that impact savings fall prior to the calendar year-end. “Now is the time to act, before the filing deadline, so you can save on 2008 taxes.”

With year end approaching, Waters suggests Canadians consider the following tax saving strategies:

Tax instalments – Deadline: December 15
Some Canadians may be required to pay 2008 income tax instalments if their estimated income tax payable for the year or their income tax payable for either of the two preceding years exceeds $3,000 (or $1,800 for Quebec residents).

Personal tax instalments are due four times a year, with the final instalment due December 15. Canadians could incur non-deductible interest if they fall short on any of their instalments, so now is a good time to revisit the instalments made to date to determine if a top-up is required.

Tax-loss selling – Deadline: December 24
Investors can sell investments which have depreciated in value so that the capital losses can be used to offset any realized gains. Typically, they'll review their capital gains and losses near the end of the year and then consider selling certain securities for losses to reduce their overall tax bill.

To be effective for tax purposes in the current year, tax-loss selling transactions must settle before the last business day of the year. Since settlement can take up to three days, BMO Nesbitt Burns is advising clients to do this by December 24 for securities trading on Canadian stock exchanges.

Donations – Deadline: December 31
Another way to offset capital gains is to donate appreciated qualifying publicly-traded securities to charity. This will produce a tax receipt equal to the fair market value of the investment donated, while at the same time potentially eliminating any capital gains tax otherwise payable on the donated security. Donations must be made before December 31 in order to receive a tax receipt for 2008.

December 31 is also the final payment date for a 2008 tax deduction or credit for expenses such as childcare, medical, tuition and alimony payments.

Tax–Free Savings Account: January 2, 2009
Understand the potential impact of recent changes to Canadian tax law and how to take advantage of the new Tax-Free Savings Account (TFSA) which was introduced in the 2008 federal budget. Beginning on January 2, 2009, investors 18 years of age or older can make contributions to a TFSA, which is expected to have broad appeal to Canadians because of its tax advantages and flexibility. Investors should take steps now to understand how they can benefit from this new account and can even open an account now to be ready to contribute in early 2009.

In addition to the tax saving strategies outlined above, Waters can also discuss:

• Tax planning and savings tips: simple things almost everyone can do to improve their tax situation.
• Importance of planning, not just filing your taxes: why entrepreneurs in particular need to look at the big picture, including taking into consideration their personal, business and family situations.