Every tax season, somebody sits across from me in April and asks the same question: “Is there anything else I can do to lower this?”

By April, for most things, the honest answer is no. Not because there was nothing to do — because the time to do it was December.

I started doing taxes in 2025 and filed for about 100 clients in my first season through City Tax Filing here in Ottawa. That first season taught me quickly: the return itself is just paperwork. The real savings happen months earlier, while you can still open an account, make a contribution, give a donation, or sell an investment on purpose.

So this is the post I wish more of those clients had read last December. It’s the refreshed version of my old tax tips post, updated with the 2026 numbers. Work through it before December 31, 2026, and you’ll walk into tax season with nothing left on the table that didn’t have to be left there.

One thing before we start: this is general information to help you plan, not tax advice for your specific situation. If your situation is complicated — a move, a separation, a business, income from another country — talk to someone about your file directly. That’s literally what I do for clients.

The 2026 numbers at a glance

Keep this table open while you read. These are the Canada Revenue Agency (CRA) figures for 2026 that come up again and again below.

Account / item	2026 figure	Year-end deadline
Tax-Free Savings Account (TFSA)	$7,000 new room for 2026; $109,000 cumulative if eligible since 2009	Dec 31, 2026*
First Home Savings Account (FHSA)	$8,000 per year; $40,000 lifetime	Dec 31, 2026
Registered Retirement Savings Plan (RRSP)	18% of 2025 earned income, up to $33,810	Mar 1, 2027
Registered Education Savings Plan (RESP) / CESG	20% grant on first $2,500 = up to $500 per year	Dec 31, 2026
Federal basic personal amount	$16,452 for most filers	—
Lowest federal tax rate	14% on first $58,523 of taxable income	—
Charitable donations	Must be donated in 2026 to claim for 2026	Dec 31, 2026

* TFSA room itself carries forward, so there is no “use it or lose it” on December 31 — but withdrawal timing has a December trap. See the TFSA section below.

Sources: CRA contribution limits and federal amounts for 2026. Your personal room is always the number in CRA My Account and on your Notice of Assessment — not this table.

Open an FHSA before December 31 — even with a small amount

If you’re saving for a first home and you don’t have a First Home Savings Account (FHSA) yet, this is the most time-sensitive move on the list.

Here’s why. FHSA room does not build up in the background the way TFSA room does. Your $8,000 a year only starts counting from the year you actually open the account. Open one in December 2026 and you lock in your 2026 room. Wait until January 2027 and that 2026 room is simply gone — you start in 2027 instead.

You don’t need $8,000 sitting around to make this worthwhile. Open it and put in what you can. Here is how the room works:

Annual limit: You can contribute up to $8,000 a year, to a lifetime maximum of $40,000.
Carry-forward: Unused room carries forward, but only up to $8,000 of carry-forward at a time. That means the most you can ever put in during a single year is $16,000.
Tax treatment: Contributions reduce your taxable income like an RRSP contribution, and a qualifying first-home withdrawal comes out tax-free with nothing to repay. If you never buy, you can transfer the balance to an RRSP without using RRSP room.
No backdating: Unlike the RRSP, there is no 60-day rule. A contribution you make in January or February 2027 counts for 2027 — it can never be claimed for 2026.

I see this one missed a lot with first-time buyers who are focused on the down payment itself. The account takes minutes to open at most banks and brokerages. Even opening it in the last week of December counts for the whole year. Don’t leave a year of room behind because you thought you needed the full $8,000 first.

And if you’re a couple both buying together, you can each open your own FHSA — that’s up to $80,000 of lifetime room between you, not $40,000 shared.

Use your TFSA room — and time your withdrawals right

The Tax-Free Savings Account (TFSA) gives you $7,000 of new room for 2026. If you’ve been eligible since the TFSA started in 2009 and have never contributed, your total room is $109,000 as of January 1, 2026. Most of us are somewhere in between — check CRA My Account for your own number, and keep your own record too, because CRA’s total can lag what your bank has reported.

There is no December 31 deadline to contribute. Unused TFSA room carries forward indefinitely, so if money is tight this month, you haven’t lost anything by waiting.

The December part is withdrawals. This is the rule that catches people:

Withdraw in December, recontribute in January. If you withdraw from your TFSA, that amount is only added back to your contribution room on January 1 of the next year — not right away.

So if you know you’ll need to take money out and you’re close to your limit, taking it out in late December instead of early January gives you the room back almost immediately, on January 1, 2027. Take the same withdrawal on January 2 and you wait until January 1, 2028 to get that room back. Same money, a full year’s difference in room — just from timing.

Go over your limit and the CRA charges 1% per month on the excess until it comes out. It’s an easy penalty to get and an annoying one to fix, so if you’re recontributing after a withdrawal, double-check your room first.

A quick personal note here: my TFSA is also where a lot of my own learning has happened. On Finance Snapshot I’m running a $250 Questrade case study — sharing the investing journey as it happens: what I buy, the fees, the mistakes — so you can follow along. The lesson from that account so far applies here too: the account you actually open and use beats the perfect account you keep meaning to open.

RRSP: you have until March 1, 2027 — but decide in December

The Registered Retirement Savings Plan (RRSP) is the one big exception to the December 31 rule. Contributions you make in the first 60 days of 2027 — up to March 1, 2027 — can still be claimed on your 2026 return. So no, you do not need to rush this one in December.

What you should do in December is the thinking, while you can still see your full-year income clearly.

Know your room. For 2026, new RRSP room is 18% of your 2025 earned income, up to a maximum of $33,810. You’d need about $187,833 of earned income to hit that cap, so for most people the 18% figure is the one that matters. Unused room from earlier years carries forward on top of that — your exact deduction limit is on your Notice of Assessment.
Claim it when it helps most. An RRSP deduction is worth more in a high-income year than a low-income year. If 2026 was an unusually good year — a bonus, extra shifts, a strong year self-employed — a contribution claimed this year saves you tax at your highest rate. If 2026 was a low year and you expect to earn more soon, you can contribute now and carry the deduction forward to a better year. Contributing and deducting don’t have to happen in the same year.
Watch the pension adjustment. If you have a workplace pension, your pension adjustment already reduces your new RRSP room. That’s normal, and CRA has already done that math on your Notice of Assessment — just don’t estimate your room from income alone and over-contribute. There’s a $2,000 lifetime buffer, and above that the excess is taxed at 1% per month.

My December habit for clients is simple: look at where your income will actually land for 2026, decide roughly how much RRSP deduction you want to use, and leave the actual contribution for January or February if cash flow is easier then. The decision belongs in December. The deposit can wait.

RESP: don’t leave the grant money behind

If you have kids and a Registered Education Savings Plan (RESP), December 31 is a hard deadline for this year’s grant.

The Canada Education Savings Grant (CESG) pays 20% on the first $2,500 you contribute per child per year — up to $500 of grant a year, and $7,200 over the child’s lifetime. Contribute $2,500 before December 31 and you’ve captured the full 2026 grant. Miss the date and that year’s contribution counts toward 2027 instead.

If you started late, there is some good news: unused grant room carries forward. You can catch up one missed year at a time — contribute $5,000 in a year and you can receive up to $1,000 of CESG, this year’s $500 plus $500 from a missed year. You can’t catch up faster than that, which is exactly why skipping another December is costly when you’re already behind.

I’ll be straight about this one because I hear the guilt around it: a lot of families can’t do $2,500 per child. Put in what you can. The grant is 20% on whatever you contribute up to that $2,500 — $500 contributed is still $100 of grant you didn’t have. Something in December beats nothing in December, every time.

Donations, losses, and expenses that end on December 31

Three more categories all share the same cliff edge. If it doesn’t happen in 2026, it doesn’t count for 2026.

Charitable donations. A donation must actually be made in 2026 to be claimed for 2026 — a pledge doesn’t count, and neither does a January donation you meant to make in December. If you give every year anyway, there’s no downside to making your December gifts before the 31st and keeping the receipts together in one place. You can also carry donations forward up to five years and claim them in a year when they help you more, so giving in December doesn’t force you to claim in April.

Tax-loss selling. If you hold investments outside your registered accounts — in a regular, non-registered account — and some are sitting at a loss, selling before year-end can let that capital loss offset capital gains you realised in 2026. Losses you don’t use this year can be carried back three years or forward indefinitely, so this isn’t wasted either way, but the sale has to settle in 2026 to count for 2026. With T+1 settlement, don’t leave this to December 31 itself — talk to your brokerage and aim to trade by December 30 at the latest. And watch the superficial loss rule: if you or your spouse buys the same investment back within 30 days before or after the sale, the loss can be denied.

Nothing inside a TFSA, RRSP, FHSA, or RESP counts here, by the way. Gains and losses inside registered accounts are ignored for tax — which is the whole point of them.

Medical and other dated expenses. Medical expenses are claimed for any 12-month period ending in the tax year, so December is a good time to check whether paying for a planned expense now, rather than in January, puts it in a better 12-month window for you. The same “do it in the year” logic applies to a lot of smaller deductions: if you were going to pay for it in January anyway and it’s deductible in the year paid, December is the month that makes it count for 2026.

If you’re self-employed, December matters even more

A good share of my City Tax Filing work is self-employed returns — the T2125 — and self-employed clients have December levers that employees simply don’t.

Bring planned expenses forward. Expenses you pay in 2026 generally count for 2026. Supplies, software, a phone plan top-up, professional fees — if it’s a real business expense you were going to pay in January, paying it in December brings the deduction a full year forward.
Know where your income lands. The flip side: where you have genuine choice in when you invoice or when a payment lands, understand which year it falls in. Don’t manufacture anything — just don’t be surprised by it in April.
Reconcile your GST/HST. If you’re registered for GST/HST, December is the time to reconcile. Make sure what you collected, what you paid on expenses, and what your books say actually match before the year closes. Cleaning this up in December is an afternoon. Cleaning it up from bank statements in April is a week.
Get the records together now. Your books decide your fee and your stress. I price self-employed returns at $150 when the books are done and $300 when they’re not, and that gap is honest — it’s the extra hours. A simple December tidy-up (receipts in one folder, bank and credit card statements downloaded, mileage noted) is the cheapest tax help you’ll ever buy yourself.

Whether you file with me or anyone else, walk into tax season with a folder, not a shoebox. Future you will be grateful.

Your December checklist

Copy this, print it, work down it. You don’t need to do all of it — do the ones that apply to you.

FHSA: Open an FHSA if you’re a first-time buyer and don’t have one — even with a small first contribution.
TFSA: Check your TFSA room in CRA My Account. Note any December withdrawal you plan, and don’t recontribute it until January.
RRSP: Estimate your total 2026 income and decide how much RRSP deduction you want for 2026. You have until March 1, 2027 to contribute.
RESP: Contribute to each child’s RESP before December 31 to capture the 2026 CESG — $2,500 per child for the full $500 grant, more if you’re catching up.
Donations: Make any 2026 charitable donations before December 31 and keep the official receipts together.
Investments: Review non-registered investments for losses worth realising, and trade early enough to settle in 2026 — aim for December 30 at the latest, and mind the 30-day superficial loss rule.
Self-employed: Pay planned deductible expenses in December where it makes sense, and gather receipts, statements, and mileage in one folder.
Records: Download your year’s bank, card, and brokerage statements while they’re easy to get, and save them with your tax folder.

That’s it. None of this is exotic. It’s the same short list every year, and every April I meet people who did three of the eight in December and are glad they did, and people who did none and wish they had. Be the first group.

If you want more of this in small pieces, I post short finance videos as well — the $250 account, TFSA vs. RRSP, beginner mistakes, the stuff I wish someone had just said plainly. And if your taxes themselves need doing, that’s my other hat: City Tax Filing in Ottawa, for personal returns, self-employed T2125s, corporate T2s, and bookkeeping.

See you in tax season — hopefully with a folder, not a shoebox.

About the author

I’m Momodou Jallow — ML. I live in Ottawa and work in healthcare settings, which is what gives me the time to run the work I actually love: taxes and teaching money in plain language.

I run Finance Snapshot to make Canadian personal finance make sense without the jargon, and City Tax Filing for the filing itself. I started doing taxes in 2025, I’m a CRA-registered representative with EFILE and RepID credentials, and I focus on personal T1 returns, self-employed T2125s, GST/HST filings, and corporate returns. My background is a Business Administration Management degree — useful in real life, because most tax questions are really life questions with numbers attached.

Momodou Jallow (ML)

Disclaimer

This post is general information about Canadian taxes for the 2026 tax year, based on CRA limits and rules as published for 2026. It is not tax, legal, or financial advice for your individual situation, and it does not create a client relationship. Tax law, limits, and deadlines change, and provincial rules vary — Ontario figures and examples may not match your province. Check your personal amounts in CRA My Account and confirm anything material before you act, or speak with a qualified tax professional about your file.

Finance Snapshot is an education project. City Tax Filing is a separate business. Mention of Questrade or any other provider is for illustration from my own case study and is not a recommendation or endorsement.

— Finance Snapshot • Ottawa, Canada —