There is still time to optimize your finances in 2024
As the year draws to a close, it's an ideal time to take stock of your financial health and prepare for the end of the 2024 tax year. Whether you’re newly practicing or well-established, this is the moment to make some key decisions about tax planning, smart investing choices and tax-saving strategies that can help ensure a strong financial future. This feature outlines some important areas to focus on as you complete your year-end financial wrap-up.
Minimize Your Tax Burden Before Year-End
Dentists are well positioned to benefit from specific tax-saving strategies, and year-end is the perfect time to ensure you’re not leaving money on the table. Using capital losses to offset gains, investing in tax-sheltered accounts like the Tax-Free Savings Account (TFSA), and contributing to a personal or spousal Registered Retirement Savings Plan (RRSP) are just a few ways you can reduce your tax burden for 2024.
If you are turning 71 this year, don’t forget to convert your RRSP to a Registered Retirement Income Fund (RRIF). Additionally, purchasing equipment or renovating your practice before year-end can provide valuable deductions. And don’t forget—charitable giving, such as donating appreciated shares, not only reduces your taxes but also helps causes you care about. Acting now can lead to significant savings for you and your practice.
Make sure you don’t miss a deadline or forget a tax slip this year. You can find many of the key year end dates and deadlines for the 2024 tax year on one webpage to help you with your tax and investment planning. Be sure to bookmark it!
The Lifetime Capital Gains Exemption (LCGE) has been adjusted for inflation and is now $1.25 million . This measure applies to dispositions that occur on or after June 25, 2024, and is welcome news for dental professionals who have a market in which they can sell their private corporation shares. Note this is only applicable to individuals who sell shares of a qualified small business corporation (QSBC).
Estate Planning
Plan Ahead for Cottage Inheritance
Many dentists own valuable properties, including family cottages that carry both financial and sentimental value. However, passing down a cottage comes with its own set of tax and legal challenges . Proper planning is essential to managing capital gains taxes and ensuring the cottage remains in the family for generations to come. Shawna Perron, Portfolio Manager at Perron & Partners, shares expert insights into strategies like shared ownership agreements, trusts, and protecting the cottage from matrimonial home claims. Early, proactive planning will help prevent future family disputes and ensure that the cottage continues to be a cherished legacy.
Smart Strategies
Start Early with Smart Investing
For new dentists, building a solid investment foundation is one of the most impactful steps you can take for your long-term financial goals. Whether you’re working with a financial advisor or managing your own portfolio, now is the time to make sure your investments are diversified across different asset classes, such as equities, bonds, and real estate. Strategies like dollar cost averaging and asset allocation can help mitigate risk while maximizing growth potential over time. And for those focusing on fixed-income investments, laddering can help manage interest rate fluctuations effectively. Starting early allows you to take full advantage of these tools while laying a strong foundation for the future. To see this in action with the magic of compound interest and investing, a newly posted video demonstrates just how much impact time has on your savings and investments.
Take Action Today
With these key strategies — whether you're minimizing taxes, planning for future inheritances, or just starting to invest as a new dentist — now is the time to take control of your financial future. As the year ends and the RRSP contribution deadline approaches, consider how you can optimize your financial strategy and maximize your savings. Speak with a financial advisor who understands the unique needs of dentists and make sure you're prepared for 2024.
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From TELUS Health
Simple strategies to stay energized over the holidays
It can be stressful this time of year—both for the body and the mind. Hectic schedules, overindulgence, and increased burdens can lead to decreases in energy and motivation. TELUS Health, the provider of the Members Assistance Program, has created a seminar to teach participants simple strategies for staying energized over the holidays – including tips to improve your sleep and eating habits, and the importance of maintaining a positive outlook during stressful times. Why not take a deep breath and check it out.