Jamie Golombek’s 2025 year-end tax tips

Transcript for the video 2025 year-end tax tips. Opens a new window.

One strategy to consider is income splitting, which can help reduce your overall family tax burden, especially when rates are favourable. Golombek explains, “Maybe you’re going to set up what’s called the prescribed rate loan and loan money to a lower-income family member, or even to kids, using a family trust. Now that the prescribed rate has dropped to 3%, this is again a new opportunity that you might want to reconsider going forward, even to 2026.”

Another key year-end tip is tax-loss selling. “One of the most common things that we talk about before the end of every year is tax-loss selling, which is the opportunity to realize a capital loss that you might have in a non-registered portfolio and then use that loss to offset any other capital gains that you realized this year, or in the prior three years,” says Golombek. This strategy can offer a valuable refund if you’ve paid taxes on gains in the last three years.

Charitable giving is also top of mind for many Canadians as the year wraps up. Golombek notes, “You must make a donation by December 31 to get a donation credit for the current year 2025. However, it’s even better if you have appreciated securities.” Making an in-kind donation of stocks, bonds or mutual funds that have increased in value to a registered charity means “the entire capital gains tax is erased on a donation in kind to a registered charity.” This can be a win-win for both your tax bill and the causes you care about.

When it comes to saving for education, Golombek points out that many focus on contributions to RESPs (Registered Education Savings Plans) but overlook the best way to withdraw funds. “If the students are currently attending school, there’s an opportunity to optimize those withdrawals by taking advantage of all the students’ personal credits, including the basic personal amount, and their tuition credit.” Reviewing a student’s expected income and credits for 2025 can help you withdraw RESP funds in the most tax-efficient way.

For those saving for a first home, the FHSA (First Home Savings Account) offers a new opportunity. “You can put in $8,000 for a year, to a maximum of $40,000 during your lifetime. The money is generally tax-deductible when you contribute and, for up to 15 years, grows completely tax sheltered. And if you make a qualifying home purchase within 15 years, the money comes out tax free,” Golombek explains. Even if you don’t make a contribution right away, simply opening an FHSA before December 31 will give you $8,000 of contribution room for 2025, which you can use either this year or in the future.

Many Canadians look forward to their tax refund, but Golombek cautions a refund means “you’ve effectively loaned your money to the government interest free.” If you have deductions or credits your employer isn’t aware of, such as RRSP contributions or charitable donations, you can apply to the Canada Revenue Agency (CRA) for a reduction of tax at source. “If the CRA approves that, you can then get a letter that you can give to your employer’s HR department, which will authorize them to reduce the amount of tax they take off from your regular paycheque, essentially getting your tax refund throughout the entire year instead of waiting until the following April.”

CIBC offers extensive resources to help guide your tax planning. “The CIBC Tax and Estate Planning team has prepared almost 100 publications that are available online,” Golombek shares. Visit cibc.com and look under Smart Advice for the Tax Tips section, where you’ll find the 2025 Tax Toolkit and more.

As you consider your year-end tax strategies, remember Golombek’s advice: “You don’t have to do this alone.” Working with a CIBC advisor, alongside a tax expert, lawyer and accountant, can help you navigate the complexities of tax planning and make the most of your financial opportunities.

While there are important steps to take as the year closes, Golombek emphasizes that “tax planning should be a year-round affair.” Staying proactive throughout the year — not just at year-end — can help you maximize your options, avoid last-minute stress, and respond to changes in your financial situation or tax laws as they arise.