Often, one doesn't think about taxes until they have to file their returns in April. By then, however, it's too late - the calendar year has already passed, and with it the opportunity to take advantage of many tax planning opportunities. Use this checklist as a guide when considering tax issues before December 31st.

Manage Your Income for 2006

• Depending on your situation, you may wish to increase or decrease your earned income for 2006. If you want make sure you're eligible to make the $19,000 maximum RRSP contribution in 2007, your taxable income in 2006 will need to be $105,555 those who are self employed, for example, could give themselves a raise.
• On the other hand if you are expecting a bonus but want to keep yourself at a lower marginal tax bracket, speak to your employer about having bonuses deferred until January.

• Employees who work from home more than half of the time can enjoy significant tax benefits - such as the ability to write off a portion of their monthly electricity and heating costs. If this situation applies to you, have your employer fill out the Canada Revenue Agency Declaration of Conditions of Employment (Form T2200) before the end of the year and you'll be able to start writing off some of your utility bills in 2007.

• The end of the year is often a time to review one's non-registered investment portfolio and take profits. Are you carrying forward any capital losses from previous years? Do you have investments that have performed particularly well in 2006? If so, the end of the year may be a good time to sell those investments and trigger capital gains. You can then turn around and buy back the same investments, but at a new adjusted cost base.
• To make sure the transaction can settle before the end of the year, you should make the trade before Friday December 22nd.

• Are you thinking about buying your first home and using funds from your RRSP to help make the down payment? Rather than make a withdrawal under the Home Buyers' Plan in 2006, think about waiting until January to do so.
• The HBP repayment schedule starts the second year following the year you made your withdrawals, so waiting until 2007 will mean that you won't have to start making payments until 2009.

• If you're considering making the maximum possible contribution to your child's RESP, you may wish to do so before year-end.
• You would not be able to contribute a lump sum of $8000 in 2007, but you could contribute $4000 in December of 2006 and another $4000 in January. Both of these contributions would also eligible for the Canada Education Savings Grant.

• Do you have any non-registered GICs or bonds that are coming to maturity in late 2006? Think about waiting until January before you reinvest. For example, the accrued interest on a one-year GIC purchased in December 2006 will be taxable in 2007 by waiting until the New Year; you could defer those taxes until 2008.
• Non-registered mutual fund investors should also consider hanging back until 2007. Funds make taxable distributions at year-end, and someone who buys in December will face a year's worth of taxes even though he or she has only held units for one month.

• Did you turn 69 this year? If so, your RRSP days are over. Before the end of December, you'll have to decide if you want to roll your funds into a Registered Retirement Income Fund (RRIF), an annuity or a combination of the two otherwise you could face having the full amount of your RRSP treated as taxable income for 2006!