For Ontario entrepreneurs, December isn’t just about holiday planning—it’s prime time for financial decision-making. Strategic moves now can create savings and flexibility in the coming year, especially when it comes to your Tax-Free Savings Account (TFSA). If you anticipate needing funds in the near future, consider whether a withdrawal before year-end makes sense.
Why Timing Matters for TFSA Withdrawals
Unlike RRSPs, TFSA contribution room resets based on the calendar year. This means:
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Withdrawals made in 2025? You can’t recontribute until 2026.
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Withdrawals made by December 31, 2024? The amount comes back as available contribution room on January 1, 2025.
If you expect to make a large purchase next year—whether it be equipment, renovations, or investing in new technology—making your TFSA withdrawal before year-end gives you the ability to replenish those funds next year without waiting an extra 12 months.
Other Key Year-End Financial Considerations
As you wrap up the year, also consider:
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Planned large expenses – Will you need to upgrade equipment, expand your office space, hire staff, or invest in marketing next year?
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Income splitting or bonuses – Should payments be made now or in January?
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Deferring income – Can any invoicing or receipts be pushed into the new year for tax purposes?
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Maximizing deductions – Are there outstanding business expenses you should pay now?
These decisions can affect not only your personal tax situation but also your business’s financial flexibility.
Discuss Financial Planning Strategy with Your Accountant
Smart financial planning in December helps you enter the new year with confidence. If you’re unsure whether to withdraw from your TFSA or how to plan for upcoming expenses, now is the time to talk it through.
At Compass CPA, we help Ontario entrepreneurs like you make year-end decisions that align with your goals. Contact us now to schedule a planning session ASAP to ensure you have time to execute your plan before January.
