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As you get together with family over the next few days, make the conversation worthwhile. Stop talking about the weather, your grandmother's hearing loss and your health concerns (including that rash that you still can't explain).
And for crying out loud, no more arguing with each other about who's going to do the chores around the house. According to an online survey of 3,000 families conducted a few years ago by Uinvue.com, most families have at least three arguments a day, lasting up to five minutes each.
That's almost 1,100 arguments each year, and more than 90 hours or about four full days of arguing a year. I'm betting that the holiday season is prime time for some of those arguments to take place.
This year, why not turn the conversation to putting money in your collective pockets? As you get together, talk about the following ideas that could save you and your family thousands in taxes.
Start a business in 2016
There's nothing like a part- or full-time business to create income and provide an opportunity to deduct all types of costs you're paying for anyway. Home-related costs, such as a portion of your mortgage interest, property taxes, repairs, landscaping and insurance, can be deducted. Costs related to your car, and furniture and computers used in your business can also become deductible. Finally, you can pay salary or wages to your family members for work they perform, which can be deducted by you.
Negotiate to hire an assistant
If your employer requires you to hire and pay for an assistant in your work, you'll be able to deduct the salary paid to that assistant. If you happen to hire your spouse or child, you'll shift income directly from your tax return to your family member's, saving taxes if they are in a lower tax bracket.
Make a gift to a child
Transfer investment income, and the resulting tax bill, to a child by giving assets to that child. In the case of minor children, focus on earning capital gains since other income will be attributed back to you. If you're giving something other than cash, be aware that you'll be deemed to have sold the asset for fair market value, which could give rise to a tax hit.
Pay household expenses
If you're the higher-income earner in the family, consider paying the household expenses. This will free up the income of your lower-income spouse to invest where any income earned will be taxed at lower rates.
Pay your kids an allowance
If your kids are working and earning their own income, consider having them invest all or part of that money. It will help them to learn investment principles and the value of compound growth. Then, help them with some of the other costs they might otherwise cover with their earnings by paying them an allowance.
Contribute to a spousal RRSP
In an ideal world, you and your spouse should have equal incomes in retirement. Contributing to a spousal RRSP will put assets into your spouse's hands where he or she will pay the tax on withdrawals later in life. Consider this strategy if one spouse is currently expected to have a higher income in retirement.
Hire family members in a move
You can hire any family member 18 or over to help in a move and pay them for their services. Have them invoice you for these services. If you're otherwise able to deduct moving costs, you'll be able to deduct these payments to family.
Hire family to look after younger kids
You can pay a child who is 18 or older to look after those who are 16 or younger. These costs will count as legitimate child-care expenses and could be deductible by you assuming you meet the other criteria for deducting child-care costs.
File a tax return for children
If your kids have earned any income at all, ensure they file a tax return even if they won't owe any tax. The earned income will create RRSP contribution room, which will save them tax later when they contribute to a registered retirement savings plan. Further, once they reach 19, they may be entitled to a GST/HST credit, which can put cash back in their pockets even if they didn't have any income. Just file a return.
Consider an estate freeze
This strategy involves freezing the value of certain assets today, so that any future growth will be taxed in the hands of, most commonly, your children. A freeze effectively transfers and defers a tax liability on future growth. Talk to a tax pro for more details.
Tim Cestnick is managing director of Advanced Wealth Planning, Scotiabank Global Wealth Management, and founder of WaterStreet Family Offices.
Tim Cestnick