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Both interest rates and the overall rate of inflation have come down from the highs recorded during 2022, but most Canadians and their families are still living with a significant degree of financial stress. While the overall rate of inflation may be down, the cost of food – the most non-discretionary of expenditures – continues to outpace that general rate of inflation. According to Statistics Canada, the cost of groceries has risen by 27.1% over the past five years.

Both interest rates and the overall rate of inflation have come down from the highs recorded during 2022, but most Canadians and their families are still living with a significant degree of financial stress. While the overall rate of inflation may be down, the cost of food – the most non-discretionary of expenditures – continues to outpace that general rate of inflation. According to Statistics Canada, the cost of groceries has risen by 27.1% over the past five years.

When the budgets of Canadian families are pushed beyond the point that day-to-day costs can be covered by income, families often turn to credit as a way of making ends meet. According to statistics compiled by Equifax Canada, the average per-consumer non-mortgage debt (meaning credit cards, lines of credit, and car loans) rose to $22,321 during the third quarter (July to September) of 2025. The difficulty, of course, is that paying off such debt – or even being able to make required payments on that debt – is almost impossible when the need to use credit arose because available income was already insufficient to cover increases in the cost of living.

The difficulty Canadians are having in managing their debt loads is borne out by statistics compiled by Equifax Canada with respect to debt repayment delinquency rates (defined as missed payment(s) which are more than 90 days past due). Those statistics show that such delinquency rates on non-mortgage debt during the third quarter of 2025 were up by 14% when compared to such rates for the third quarter of 2024. And, while some of the highest year-over-year increases in delinquency rates on non-mortgage debt were reported for consumers under the age of 36 (up by 18.55%), Canadians over the age of 35 aren’t, however, immune to missing payments on their credit card, line of credit, or car loan obligations. For those groups (aged 36 to over 65), the average delinquency rate for the third quarter of 2025 was up by 11.1% when compared to the same quarter in 2024. Not surprisingly, across all age groups, the greatest increase in delinquency rates occurred in urban centres where the cost of living is highest, including Toronto and Vancouver. And, finally, as noted by Equifax, “[T]he holiday season is a time when credit card spending typically rises $300-$500 per consumer and previous Equifax data shows that missed card payments increase by roughly 7 per cent come January.”

When individuals or families need to turn to credit to meet day-to-day financial obligations and then have difficulty repaying or even servicing that debt, the worst-case scenario is insolvency. And it is the case that an increasing number of Canadians are reaching the point at which they see their available options narrow to the point that they must consider making a consumer proposal or even declaring bankruptcy. Statistics released by the Office of the Superintendent of Bankruptcy for individuals for the month of September 2025 (available at https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/statistics-and-research/insolvency-statistics-canada-september-2025) shows that consumer insolvencies increased by 10.6% during that month, as compared to figures from September 2024.

Neither individuals who are struggling with debt nor their creditors want to see things reach a point at which the debtor is insolvent. Individuals or families who are unable to manage their current debt obligations should be aware that there are viable options open to them – and equally, that there are courses of action which should be avoided.

Where an individual or a family feels overwhelmed by debt, it’s inevitable that they will be vulnerable to approaches which promise to make the problem go away – and which may even include offers to provide funds which can be used to repay existing debt. The website of the Financial Consumer Agency of Canada (an agency of the federal government) at https://www.canada.ca/en/financial-consumer-agency/services/debt.html and https://www.canada.ca/en/financial-consumer-agency/services/debt/debt-settlement-company.html contains a warning about using the services of such “debt settlement companies”, making the following points:

• Companies or agencies can’t guarantee they will solve your debt problems.
• Companies or agencies can’t quickly and easily fix your credit score.
• Companies should not (as they sometimes do) encourage you to take out a high-interest loan to pay off your debts.
• Companies and agencies may misrepresent services they offer as being part of a government program.

These warnings are based on the fact that debt settlement companies are for-profit businesses, not service providers. They collect fees from consumers who are in financial difficulty, sometimes making unrealistic commitments with respect to what they can accomplish. For instance, while such companies may promise to negotiate with creditors in order to reduce any amount owed, or the interest rate payable on existing debt, the fact is that creditors are not obliged to speak to or negotiate with a debt settlement company with respect to another person’s debts. Debt settlement companies may promise to “fix” a poor credit rating or credit report, but they have no actual power to do so. And the fees owed to such companies will almost certainly have to be paid, whether or not they can actually produce the results they promise.

That reality does not, however, mean that there is no help for individuals and families seeking to find their way out of debt, or that it’s necessary to pay large fees or to take on additional debt to do so. In fact, in almost every community of any size, there will be a credit counselling agency which can assist consumers with debt management and debt repayment and, equally important, will help the individual or family to establish financial management practices (like setting up a family budget) to ensure their future financial stability.

Such credit counselling agencies operate on a not-for-profit basis and provide their services at little or no cost to individuals or families who seek their assistance. Where credit counselling is needed, a credit counsellor will work with an individual or family to help identify the options which are available to them and the pros and cons of each option.

Most credit counselling agencies are members of Credit Counselling Canada (to be a member of Credit Counselling Canada, an agency must be accredited and must operate only on a not-for-profit basis), and a listing of their member agencies and locations can be found on the Credit Counselling Canada website at https://creditcounsellingcanada.ca/locate-a-counsellor/?cc=ON.

Detailed information on the kinds of services which are provided by such agencies is available on the same website at https://creditcounsellingcanada.ca/.

The approaching end of one calendar year and the start of another often causes individuals to reflect on their current life circumstances and on whether the new year might be the time to consider making a change – even a major change – in those circumstances.

The approaching end of one calendar year and the start of another often causes individuals to reflect on their current life circumstances and on whether the new year might be the time to consider making a change – even a major change – in those circumstances.

One the biggest life changes anyone can make is the decision to leave the work force and enter retirement. And, while almost everyone looks forward to retirement and an end to the day-to-day demands of working life, there’s also no question but that the decision to give up a regular paycheque is a stressful one. Particularly in a time when the cost of life’s necessities seems to be continually increasing, individuals wanting to retire have to wonder whether they can actually afford to do so, or whether it would be foolhardy, in light of the current economic realities, to give up a reliable, regular paycheque.

The first financial task faced by anyone contemplating retirement in the very near future is to determine what financial resources they will have to live on, and whether those resources are sufficient. And, while no one can accurately predict where inflation or interest rates are going, it is nonetheless possible to formulate “best case” and “worst case” scenarios, and to test one’s retirement income expectations against both.

For most Canadians, income in retirement will come from three sources. The first two sources – a Canada Pension Plan (CPP) retirement benefit and Old Age Security (OAS) payments – will be received by nearly all retirees. The fortunate minority who are members of an employer-sponsored registered pension plan will also receive a monthly benefit from that plan. For the majority of Canadian retirees who will not receive a pension from their employer, the balance of their income in retirement (after CPP and OAS) will come from private retirement savings accumulated in registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs), and tax-free savings accounts (TFSAs). The real question for most Canadians is how to determine the amount of annual after-tax income which all those sources of income will generate during their retirement years, and that’s not a simple calculation.

Money can be withdrawn from an RRSP, RRIF, or TFSA at any age, a CPP retirement pension can start anytime from age 60 to age 70, and Old Age Security benefits can be received as early as age 65 or as late as age 70. For both CPP and OAS, benefits will rise with each month that receipt of such benefits is deferred. As well, income from the different types of retirement income may be subject to different tax treatment, meaning that the after-tax amount received on $100 of income may vary widely, depending on the nature and source of that income.

The number of factors to consider and, especially, the complexity which results from the interaction of those factors could reasonably lead the average Canadian to conclude that it’s just not possible to make an accurate determination of the best way to structure their income in retirement, in order to ensure a reasonable income throughout their retirement years. But help is at hand – and at no cost!

That help is in the form of two online retirement planners which are available on the Government of Canada website. The first of those is a webpage entitled Learn and Plan for your Retirement, which can be found at https://www.canada.ca/en/services/retirement.html. While this webpage does include financial calculations, it goes beyond finances to provide more broad-based information on transitioning to and living in retirement.

For purely financial calculations, the federal government provides a Retirement Income Calculator. That Calculator is included in the Learn and Plan for your Retirement webpage, but can also be found in a stand-alone version at https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html.

Using the Retirement Income Calculator, individual Canadian taxpayers can enter their personal data, including their date of birth, gender and planned age of retirement, without the need to provide any personal identifying information. The user is then asked to provide information on income amounts which will be received from various sources, including any employer pension and Canada Pension Plan amounts and the age at which the user plans to begin receiving such income. Information is requested on the user’s period of residency in Canada, in order to determine whether they will be eligible to receive Old Age Security benefits and the amount of OAS benefits which will be provided at different ages. The calculator also allows the user to input the total amount of retirement savings accumulated to date. Finally, information is requested on any other sources of income which will be available during retirement.

Using that data, the calculator estimates the amount of income which will be available to the individual from each source during each year of their retirement and generates a bar graph and a table showing those income amounts.

The real benefit of the calculator, however, lies in the individual’s ability to vary the inputs – to create “what-if” scenarios in order to determine the effect any changes made will have on retirement income at various ages. Users can change the age at which they choose to receive government-sponsored retirement benefits like CPP and OAS, or can specify a different rate of return (pre- or post-retirement) earned on retirement savings. They can also change the period of time (i.e., life expectancy) over which retirement income will be spread. That way, the user can obtain answers to frequently asked questions like the following:

How much more will I receive if I accelerate – or delay – receipt of Canada Pension Plan or Old Age Security benefits, or both, for one, two, or more years?

What if I work an additional year or two after age 65 before starting RRSP withdrawals?

What if I earn income from part-time employment during retirement?

What if I choose to begin receiving CPP and OAS as soon as I am eligible, but defer making RRSP withdrawals?

What if I live longer than the average life expectancy?

For each of these what-if fact scenarios, the calculator will determine the effect that particular change will have on the amount of income receivable from each different retirement income source, and will provide a summary of income for each year of retirement from all such sources under each fact scenario created by the user.

There are, of course, some factors which can’t be incorporated into any calculator because they cannot be predicted or planned for. No one can predict how long their retirement will last (although the Retirement Income Calculator does project retirement income based on average life expectancy for individuals of the age and gender of the user). Similarly, it’s never possible to know what investment returns will be earned on retirement savings during retirement, or what the rate of inflation will be. The calculator’s ability to estimate future income data based on a number of different fact patterns does, however, allow users to create retirement income projections under both “best-case” and “worst-case” retirement income scenarios. And, based on those income projections, an individual can determine whether retirement during the upcoming 2026 calendar year is financially feasible.

As the holiday season approaches, and plans are made for seasonal celebrations and gift-giving, the idea that such activities could have tax consequences isn’t one that occurs to most Canadians. And, in most situations, there is no need to consider that unwelcome possibility, as our tax system has no application where gifts are given and parties held between and among friends and family members. However, where the gift giver or person or company sponsoring the holiday celebration is the employer of the recipient employee, there can be unintended (and unwanted) income tax consequences for that employee.

As the holiday season approaches, and plans are made for seasonal celebrations and gift-giving, the idea that such activities could have tax consequences isn’t one that occurs to most Canadians. And, in most situations, there is no need to consider that unwelcome possibility, as our tax system has no application where gifts are given and parties held between and among friends and family members. However, where the gift giver or person or company sponsoring the holiday celebration is the employer of the recipient employee, there can be unintended (and unwanted) income tax consequences for that employee.

It’s traditional for employers to provide employees with a little something “extra” at this time of year. Sometimes it’s a salary or wage bonus, or a gift, or a holiday celebration sponsored and hosted by the employer – and sometimes it’s all three. What employers certainly don’t want to do is to create a tax headache for their employees. Unfortunately, it’s also the case that a failure to properly structure such gifts or other extras like holiday parties can result in a tax cost to those employees when it comes time to file the tax return for the year next spring.

Trying to formulate and administer the tax rules around holiday gifts and celebrations is something of a no-win situation for the CRA. On an individual, or even a company level, the amounts involved are usually small, or even nominal, and the range of situations which must be addressed by the related tax rules are virtually limitless. As a result, the cost of drafting and administering those rules can outweigh the revenue generated by the enforcement of such rules, to say nothing of the potential ill-will generated by imposing tax consequences on holiday gifts or parties. Nonetheless, the potential exists for employers to provide what would otherwise be taxable remuneration in the guise of holiday gifts, and it’s the responsibility of the tax authorities to ensure that such situations don’t slip through the tax net.

The starting point for the Canada Revenue Agency’s rules is that any gift (cash or non-cash) received by an employee from their employer at any time of the year is considered to constitute a taxable benefit, to be included in the employee’s income for that year.

The CRA does, however, carve out some administrative concessions in this area, allowing non-cash gifts (as defined by the Agency, and within a specified annual dollar limit) to be received tax-free by employees, where such gifts are given on significant dates or events, like religious holidays such as Christmas or Hanukkah, or on the occasion of a birthday, a marriage, or the birth of a child.

In sum, the CRA’s administrative policy is that non-cash gifts to an arm’s length employee (meaning, generally, someone who is not related to the employer), regardless of the number of such gifts, will not be taxable if the total fair market value of all such gifts (including goods and services tax or harmonized sales tax) to that employee is $500 or less annually. The total value over $500 annually will be a taxable benefit to the employee and must be included on the employee’s T4 for the year, and on which income tax must be paid.

It’s important to remember the “non-cash” criterion imposed by the CRA, as the $500 per year administrative concession does not apply to what the CRA terms “cash or near-cash” gifts, and all such gifts are considered to be a taxable benefit and included in income for tax purposes, regardless of amount. For this purpose, the CRA considers both currency and cheques to be cash. As well, in situations in which an employee selects and purchases something, submits a receipt to the employer, and receives reimbursement for that purchase, that employee is considered to have received a cash gift, in the amount of the purchase/reimbursement.

Other instances of gifts made to employees are not so clear cut, as even a gift or award which cannot be converted to cash can be considered by the CRA to be a near-cash gift. Drawing a firm line between cash/near-cash gifts and non-cash gifts can be difficult, and the CRA provides the following information to help illustrate that difference.

Examples of a near-cash gift or award

• Something easily converted to cash, such as bonds, securities, or precious metals;
• Gift cards (with the exception outlined below);
• A prepaid card issued by a financial institution (for example, Master Card, Visa, and American Express) that can be used to pay for purchases; and
• Digital currency which is electronic money (i.e., cryptocurrencies not issued by a government or central bank).

At one time, the CRA considered all gift cards to be near-cash gifts and fully taxable to the employee who received one, but, since 2022, the Agency has provided an administrative concession in that area. Specifically, a gift card that meets all of the following criteria will be treated as a non-cash gift, and subject to the usual rules governing such non-cash gifts:

• the card comes with money already on it and can only be used to purchase goods or services from a single retailer or group of retailers identified on the card;
• the terms and conditions of the gift card clearly state that amounts on the card cannot be converted into cash; and
• the employer keeps a log to record details of the gift card information including the date, the employee’s name, and the reason for providing the gift card, as well as the type and amount of the gift card and the name of the retailer.

While the rules around holiday gifts and celebrations are not particularly difficult to understand, they are very detailed, and it may seem nearly impossible to plan for employee holiday gifts without running afoul of one or more of the CRA’s rules and administrative policies in this area. However, designing a tax-effective plan is possible, if the following rules are kept in mind.

• Cash or near-cash gifts should be avoided, as they will, no matter how large or small the amount, almost always create a taxable benefit to the employee. The sole exception to that rule is the exception carved out by the CRA which now treats gift certificates as non-cash gifts, but only where such gift certificates meet the criteria listed above.
• Where non-cash holiday gifts are provided to employees, gifts with a value of up to $500 can be received free of tax. The employer must be mindful of the fact that the $500 limit is a per-year and not a per-occasion limit. Where the employee receives non-cash gifts with a total value of more than $500 in any one taxation year, the portion over $500 is a taxable benefit to the employee.

When it comes to holiday parties and celebrations, the rules imposed by the CRA in determining whether such events create a taxable benefit for employees have a long and tortuous history. The current rule is that a holiday social event does not create a taxable benefit to employees where the event is open to all employees (for instance, not just management level employees) and the per person (including spouses or common-law partners of employees) cost of the event is below a specified threshold.

For the 2025 tax year, an employer-sponsored social event will not create a taxable benefit for employees if the per person cost is $150 or less (including taxes). Ancillary costs such as transportation home, taxi fare, and overnight accommodation for attendees are not included in the total cost limit for the event.

Finally, employers should note that where the per person dollar limits outlined above for holiday events are exceeded, the entire per person cost of the event (including ancillary costs) is treated as a taxable benefit – not just the amount by which the per person cost exceeds those prescribed dollar limits. And, finally, in order to benefit from those prescribed limits, employers are restricted to holding six or fewer employer-paid social events each year.

The range and variety of social events and employee gifts which can be provided by an employer to its employees is almost limitless, and where the government seeks to draft rules to govern the tax treatment of such a range of possibilities, some degree of complexity is inevitable. The best advice to be given to employers in the circumstances is to consider carefully the kinds of gifts which are given (avoiding cash and near-cash gifts) and to be mindful of the dollar amount limits imposed on non-cash gifts and employer-paid social gatherings. No matter how enjoyable the social occasion may be, or how much the gift is appreciated, any kind of party or gift which increases the employee’s income tax bill for the year is likely to leave the employer looking less like Santa and more like Scrooge.

December 31, 2025 marks not just the end of the calendar year, but the end of the 2025 tax year for every individual Canadian taxpayer. Most Canadians are thinking about anything but income taxes during the holiday season, but the reality is that December 31 is often a critical date when it comes to determining how much tax one will pay for 2025. In some cases, steps need to be taken by December 31 in order to obtain administrative relief from interest or penalty charges which have been imposed by the Canada Revenue Agency. In other cases, not taking certain actions prior to the end of the calendar year will mean losing out on deductions and credits which might otherwise have been claimed on the return for 2025, and which would have reduced tax payable for the year. And a failure to meet that December 31 deadline cannot be remedied: in almost all cases, only actions taken prior to the end of the year can lower 2025 taxes payable.

December 31, 2025 marks not just the end of the calendar year, but the end of the 2025 tax year for every individual Canadian taxpayer. Most Canadians are thinking about anything but income taxes during the holiday season, but the reality is that December 31 is often a critical date when it comes to determining how much tax one will pay for 2025. In some cases, steps need to be taken by December 31 in order to obtain administrative relief from interest or penalty charges which have been imposed by the Canada Revenue Agency. In other cases, not taking certain actions prior to the end of the calendar year will mean losing out on deductions and credits which might otherwise have been claimed on the return for 2025, and which would have reduced tax payable for the year. And a failure to meet that December 31 deadline cannot be remedied: in almost all cases, only actions taken prior to the end of the year can lower 2025 taxes payable.

While there isn’t much time left in 2025 to implement the available tax saving strategies, the good news is that the most readily available of those strategies don’t involve a lot of planning or complicated financial structures – in many cases, it’s just a question of considering the timing of steps which would have been taken in any event. What follows is a listing of some of the steps which should be considered by most Canadian taxpayers as the calendar and tax year-end approaches.

Taxpayer requests for penalty or interest relief – December 31, 2025 deadline

Taxpayers are entitled to request relief from interest or penalty charges which have been imposed by the Canada Revenue Agency. In order for such relief to be provided, requests must be sent to the Agency within 10 years from the end of the calendar year or fiscal period concerned, as the Minister of National Revenue has no authority to provide relief when the request is for a tax year or fiscal period that ended more than 10 years before the calendar year in which the request is made.

The December 31, 2025 deadline therefore applies to taxpayer relief requests for:

• the 2015 tax year;
• any reporting period that ended during the 2015 calendar year; and
• any interest and penalties that accrued during 2015 for any tax year or reporting period.

While such requests can be made using the form issued by the CRA and sent by mail or courier, they can also be made online, using the Agency’s My Account service. As the Minister does not have the authority to accept late-filed requests, an online application is likely preferable where the application deadline is imminent. Details of the relief program and information on how to apply for penalty or interest relief can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/cancel-waive-penalties-interest.html.

Making a final RRSP contribution

Most Canadians are aware that an RRSP contribution can be made anytime up to 60 days after the end of the calendar/tax year and claimed as a deduction on the return for that calendar/tax year. There is, however, an important exception to that rule, of which most Canadians are likely unaware.

Every Canadian who has an RRSP must collapse that plan by the end of the year in which they turn 71 years of age – usually by converting the RRSP into a registered retirement income fund (RRIF) or by purchasing an annuity. An individual who turns 71 during the year is still entitled to make a final RRSP contribution for that year, assuming that they have sufficient contribution room. However, in such cases, the 60-day window for contributions after December 31 is not available. Any RRSP contribution to be made by a person who turns 71 during 2025 must be made by December 31, 2025. Once that deadline has passed, no further RRSP contributions are possible.

Medical expenses

The federal and all provincial and territorial governments provide a non-refundable tax credit for eligible medical expenses incurred. Most Canadians will incur such expenses; while we benefit from a publicly-funded health care system, there is nonetheless a long list of medical and para-medical expenses which must be paid for out-of-pocket.

Individual taxpayers are entitled to claim the medical expense tax credit for all qualifying medical expenses incurred during any 12-month period which ends during the taxation year. In other words, the taxpayer can choose the 12-month period for which medical expenses incurred create the highest tax credit amount. However, as with other such credits, any expense, in order to be claimed on the 2025 tax return, must be incurred before the end of 2025.

There is an additional requirement for claims for the medical expense tax credit: only medical expenses which exceed the lesser of $2,834 or 3% of the taxpayer’s net income for the year can be claimed. For 2025, that means that any taxpayer whose net income for the year is less than $94,467 will be entitled to claim medical expenses that are greater than 3% of their net income for the year. Those having net income of $94,467 or greater will be limited to claiming qualifying expenses which exceed the $2,834 threshold. Finally, it’s possible to combine medical expenses incurred by both spouses and by their minor children, and to and make that combined claim on a single return. In most cases, a better tax result can be obtained where that claim is made on the return of the lower-income spouse.

It is unfortunate, given the number of Canadians who are in a position to claim the medical expense tax credit, that the computation of that credit can be confusing. The CRA does provide detailed information on its website about the medical expense tax credit, and that information can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4065.html. While the material provided on that webpage refers to the 2024 tax year, the same rules will apply for 2025, with the exception of the 2025 medical expense tax credit/net income threshold amount described above.

Charitable donations

The federal government and each of the provincial and territorial governments provide a tax credit for donations made to registered charities during the year. In all cases, in order to claim a credit for a donation in a particular tax year, that donation must be made by the end of that calendar year.

There is, however, another reason to ensure that planned donations are made by December 31. The credit provided by each of the federal, provincial, and territorial governments is a two-level credit, in which the percentage of the credit claimable increases with the amount of donation made. For federal tax purposes, the first $200 in donations is eligible for a non-refundable tax credit equal (for 2025) to 14.5% of the donation. The credit for donations made during the year which exceed the $200 threshold is, however, calculated as 29% of the excess. For the minority of taxpayers who have taxable income (for 2025) over $253,414, charitable donations above the $200 threshold can receive a federal tax credit of 33%.

As a result of the two-level credit structure, the best tax result is obtained when donations made during a single calendar year are maximized. For instance, a qualifying charitable donation of $400 made in December 2025 will receive a federal credit of $87.00 ($200 times 14.5% plus $200 times 29%). If the same amount is donated, but the donation is split equally between December 2025 and January 2026, the total credit claimable is only $58.00 ($200 times 14.5% plus $200 times 14.5%), and the 2026 donation can’t be claimed until the tax return for 2026 is filed in April 2027. And, of course, the larger the donation in any one calendar year, the greater the proportion of that donation which will receive credit at the 29% level rather than the 14.5% level.

It’s also possible to carry forward, for up to five years, donations which were made in a particular tax year. So, if donations made in 2025 don’t reach the $200 level, it’s usually worth holding off on claiming the donation and carrying it forward to the next year in which total donations, including carryforwards, are over that threshold. Of course, this also means that donations made but not claimed in any of the 2020, 2021, 2022, 2023, or 2024 tax years can be carried forward and added to the total donations made in 2025, and the aggregate amount then claimed on the 2025 tax return.

Generally – and especially in Ontario, which is the only province or territory which imposes a high-income surtax – it makes sense for the higher-income spouse to make the claim for the total of charitable donations made by both spouses. Doing so will reduce the overall tax payable by that spouse and will thereby minimize (or avoid) liability for the Ontario high-income surtax.

Reviewing tax instalments for 2025

Millions of Canadian taxpayers (particularly the self-employed and retired Canadians) pay income taxes by quarterly instalments, with the amount of those instalments representing an estimate of the taxpayer’s total liability for the year.

The final quarterly instalment for this year will be due on Monday, December 15, 2025. By mid-December, most Canadians have a reasonably accurate idea of what their income and deductions will be for 2025 and so will be in a position to estimate what the final tax bill for the year will be, taking into account any tax planning strategies already put in place, as well as any RRSP contributions which will be made. While the tax return forms to be used for the 2025 year haven’t yet been released by the Canada Revenue Agency, it’s possible to arrive at an estimate by using the 2024 T1 form or tax return preparation software for the 2024 tax year. Increases in tax credit amounts and tax brackets from 2024 to 2025 (as well as the federal tax rate reduction which took effect on July 1, 2025) will mean that using the 2024 software will likely result in a slight over-estimate of tax liability for 2025. A listing of such tax preparation software programs which can be downloaded from the CRA website (free of charge or at a nominal cost) is available at https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/how-file/tax-software/find-software.html.

Once an estimate of one’s tax bill for 2025 has been arrived at, that amount should be compared to the total of tax instalments already made during 2025 (that information is available by checking one’s online tax account on the Canada Revenue Agency website, or by calling the CRA’s Individual Income Tax Enquiries line at 1-800-959-8281). Depending on the result, it may then be possible to reduce the amount of the tax instalment to be paid on December 15 – and thereby free up some additional funds for the inevitable holiday (over)spending!

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

They can be accessed below.

Corporate:

Issue #74 Corporate

Personal:

Issue #74 Personal