Year-End Tax Checklist for XEQT Investors in Canada

A couple of years ago, I reached December 28th feeling pretty good about my finances. I had been buying XEQT consistently all year, my portfolio was growing, and I was mentally patting myself on the back. Then I logged into my CRA My Account on a whim and realized I still had over $12,000 in unused TFSA contribution room – including carryforward room from years I hadn’t even noticed. That was $12,000 that could have been growing completely tax-free, sitting in my chequing account earning basically nothing. I scrambled to transfer the money and buy XEQT before the year ended, but by the time the transfer settled, it was January 2nd. I had missed the deadline by two days and lost an entire year of tax-free growth on that money.

That was the moment I created this checklist. Now, every November, I sit down for about 30 minutes and run through it. It has saved me from making that same mistake again, and it has probably saved me thousands of dollars in taxes I would have otherwise left on the table.

Whether you hold XEQT in one account or across several, this checklist will make sure you head into the new year with everything optimized. Print it out, bookmark it, and revisit it every year.

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1. Max Out Your TFSA

This is the single most impactful thing most Canadians can do before year-end: make sure your Tax-Free Savings Account is maxed out.

Every dollar inside your TFSA grows completely tax-free – forever. No tax on dividends, no tax on capital gains, no tax when you withdraw. For an XEQT investor, this is the most powerful account you have. The more of your XEQT you can hold inside a TFSA, the better.

Your year-end TFSA checklist:

• Log in to CRA My Account and check your current TFSA contribution room
• Calculate how much unused room you have (current room = lifetime limit minus all contributions plus all withdrawals from prior years)
• Transfer available cash into your TFSA before December 31
• Buy XEQT (or set up auto-invest) once the funds arrive
• If you withdrew from your TFSA this year, remember that room does not reopen until January 1 of next year – do not recontribute it now or you will overcontribute

The TFSA deadline is December 31. Unlike the RRSP, there is no grace period into the next year. If you miss it, that year’s contribution room is gone until next January (the room itself carries forward, but you lose the time in the market).

Here are the annual TFSA limits for recent years:

If you turned 18 in 2009 or earlier and have never contributed, your total available room in 2026 is $109,000. That is a lot of XEQT growing tax-free.

2. Plan Your RRSP Contribution

Here is where the RRSP gets interesting at year-end: the official RRSP contribution deadline for the current tax year is 60 days into the next calendar year (typically March 1, or February 28 in a non-leap year). That means any contribution you make between January 1 and roughly March 1 of next year can still be deducted on this year’s tax return.

But here is the strategy most people miss: if you contribute before December 31 instead of waiting until February, you get two extra months of tax-sheltered growth. That money starts compounding inside your RRSP immediately rather than sitting in a taxable account for another 60 days.

Over a 30-year career, those extra two months of growth every single year add up to a meaningful amount.

Your year-end RRSP checklist:

• Check your RRSP deduction room on your most recent Notice of Assessment (NOA) or CRA My Account
• Decide how much to contribute before December 31 vs. in January/February
• If your employer offers RRSP matching, confirm you have contributed enough to get the full match – this is free money
• Consider whether it makes more sense to contribute to your TFSA first (if your marginal tax rate is low, the TFSA often wins)
• If you expect a raise or bonus next year, you might save the deduction for next year when it is worth more at a higher tax bracket

3. Max Out Your FHSA

The First Home Savings Account (FHSA) is still relatively new, and I think a lot of eligible Canadians are sleeping on it. If you qualify – meaning you are a Canadian resident, at least 18 years old, and have not owned a home in the current year or the preceding four calendar years – this account is an incredible deal.

You get a tax deduction when you contribute (like an RRSP), and the withdrawals for a qualifying home purchase are completely tax-free (like a TFSA). It is the best of both worlds.

Your year-end FHSA checklist:

• Confirm you are eligible (first-time home buyer as defined by the CRA)
• Contribute up to $8,000 before December 31 (this is the annual limit)
• If you did not max out last year, you may have up to $8,000 in carryforward room (maximum carryforward is $8,000, so the most you can contribute in any one year is $16,000)
• Buy XEQT or your preferred investment inside the FHSA
• Remember: you must open the FHSA to start the clock on contribution room. If you have not opened one yet, do it now – even if you can only contribute a small amount

The FHSA deadline is December 31, same as the TFSA. No grace period.

4. Review Tax-Loss Harvesting Opportunities

If you hold investments in a non-registered (taxable) account that are currently sitting at a loss, you have an opportunity to turn that paper loss into real tax savings before year-end.

Tax-loss harvesting means selling an investment at a loss to “realize” the loss, then using that capital loss to offset capital gains on your tax return. If your losses exceed your gains, you can carry them back up to three years or forward indefinitely.

Your year-end tax-loss harvesting checklist:

• Review your non-registered holdings for any positions that are below your adjusted cost base (ACB)
• Calculate the potential tax savings: (Loss amount) x (capital gains inclusion rate) x (your marginal tax rate)
• If selling, buy a substitute ETF immediately to stay invested (e.g., sell XEQT and buy VEQT, or vice versa)
• Respect the superficial loss rule: do not repurchase the identical security within 30 calendar days before or after the sale, and make sure your spouse does not either
• Set a calendar reminder for 31 days after the sale so you can switch back if you want to
• Make sure to complete the sale with enough time for it to settle before December 31 (trades typically settle in one business day, but do not leave it to December 30)

If you are an XEQT-only investor and hold everything in registered accounts, you can skip this step entirely. But if you have outgrown your registered account room and hold XEQT (or other investments) in a non-registered account, this is worth checking every year.

5. Check Your XEQT Distribution Dates

XEQT typically pays distributions quarterly, and there is usually a distribution in December. This matters if you are buying XEQT in a non-registered account near year-end.

Here is why: if you buy XEQT just before the ex-dividend date, you will receive the distribution and owe tax on it – even though the share price drops by the distribution amount on the ex-date. You are essentially paying tax on your own money coming back to you. It is not a disaster, but it is inefficient.

Your year-end distribution checklist:

• Check the XEQT ex-dividend date for December (BlackRock publishes these on the iShares website)
• If buying in a non-registered account, consider waiting until after the ex-dividend date to avoid a taxable distribution on new shares
• If buying in a TFSA, RRSP, or FHSA, the distribution date does not matter – there is no tax impact either way, so buy as soon as you have the cash

In practice, the XEQT distribution amount is usually modest (often under $0.20 per unit), so the tax impact of buying a few days before the ex-date is small. But if you are purchasing a large amount – say $20,000 or more – it is worth checking the date.

6. Review Your Non-Registered Account

If you hold XEQT in a non-registered account, your year-end review should cover a few important tax items.

Capital gains inclusion rate: As of the 2025 budget changes, the capital gains inclusion rate for individuals remains 50% on the first $250,000 of annual capital gains. Gains above $250,000 are included at 66.7%. For most retail investors holding XEQT, the 50% rate is what applies.

Your non-registered account checklist:

• Review your total realized capital gains for the year – are there any losses you can harvest to offset them? (See section 4)
• Check whether you have any large unrealized gains that you might want to strategically realize in a low-income year
• Make sure you are tracking your adjusted cost base (ACB) for every lot of XEQT purchased (more on this in section 10)
• Review your T3 or T5 slips from last year to make sure you understand what types of income XEQT distributed (Canadian dividends, foreign income, capital gains, return of capital)
• If you received any return of capital (ROC) distributions, confirm that your ACB has been adjusted downward accordingly

7. Rebalance If Needed

Year-end is a natural time for your annual portfolio checkup. If you are a pure XEQT investor, rebalancing is built in – that is the whole point of an all-in-one ETF. BlackRock rebalances the underlying funds for you.

But “rebalancing” at the portfolio level means something broader: making sure your overall financial picture still matches your goals.

Your year-end rebalance checklist:

• Has your risk tolerance changed? (New job, new mortgage, new baby, closer to retirement?)
• Is XEQT (100% equities) still appropriate, or should you consider adding bonds (e.g., XBAL or XGRO)?
• If you hold other investments alongside XEQT, is your overall allocation still where you want it?
• Check your overall net worth and compare it to your financial goals – are you on track?

One thing I do every December is pull up a simple spreadsheet with all my account balances and compare it to a year ago. It takes five minutes and it is one of the most motivating things you can do as an investor.

8. Check Your Auto-Invest Settings

If you use Wealthsimple’s auto-invest feature (formerly called recurring buys), year-end is the right time to make sure everything is still dialed in.

Your auto-invest checklist:

• Confirm auto-invest is still active and set to the correct amount
• If you got a raise this year, consider increasing your contribution amount
• Make sure auto-invest is pointed at the right account (TFSA vs. RRSP vs. non-registered)
• If your TFSA or RRSP is close to being maxed for the year, adjust the amount so you do not accidentally overcontribute
• Check the schedule – weekly, biweekly, or monthly? Align it with your pay schedule if possible

Auto-invest removes the temptation to time the market. You buy consistently, you dollar-cost average, and you do not have to think about it. But it is worth a five-minute review once a year to make sure the numbers still make sense.

9. Review Beneficiary Designations

This one takes two minutes and most people never do it. But it matters more than you think.

Your beneficiary checklist:

• Check your TFSA beneficiary or successor holder designation – is it up to date?
• Check your RRSP beneficiary designation
• Check your FHSA beneficiary designation
• If you got married, divorced, had a child, or experienced any major life change this year, update your designations
• For your TFSA, consider naming your spouse as successor holder rather than just a beneficiary – this allows the account to transfer directly to them without losing the tax-free status

10. Document Your Adjusted Cost Base (ACB)

If you hold XEQT in a non-registered account, keeping accurate ACB records is not optional – it is essential for filing your taxes correctly.

Your ACB changes every time you buy shares, sell shares, or receive a return of capital distribution. If you are dollar-cost averaging into XEQT (buying regularly at different prices), your ACB per share is constantly shifting.

Your ACB documentation checklist:

• Make sure you have a record of every XEQT purchase in your non-registered account (date, number of shares, price per share, total cost)
• Record any sales you made this year (date, number of shares, sale price, ACB at time of sale)
• Adjust your ACB for any return of capital distributions (these reduce your ACB)
• Use a tracking tool like AdjustedCostBase.ca – it is free and purpose-built for Canadian investors
• Cross-reference your records with your brokerage statements, but do not rely solely on the brokerage’s “book cost” figure (it is often inaccurate after transfers or certain distribution types)
• Export or back up your records somewhere safe – you do not want to reconstruct years of transactions during tax season

I personally use AdjustedCostBase.ca and update it once a quarter. It takes about 10 minutes per quarter, and it means tax season is painless rather than a scramble.

11. Plan Your January Contributions

The last item on the year-end checklist is actually about next year. A little planning now means you hit the ground running on January 1.

Your January planning checklist:

• New TFSA contribution room opens on January 1 – have the cash ready to transfer immediately
• Set up a pre-authorized transfer to move money into your TFSA on January 2 (or the first business day)
• If you have RRSP room remaining, plan your contribution for January/February to still deduct it on this year’s tax return (deadline is approximately March 1)
• New FHSA room ($8,000) also opens on January 1 if you are eligible
• Review your budget and set your investment targets for the new year
• If you are expecting a tax refund from RRSP contributions, plan to invest the refund back into your TFSA or RRSP (this is the “RRSP refund recycling” strategy and it supercharges your savings)

The best XEQT investors I know treat January 1 like a mini financial new year. They have the cash ready, the transfers queued, and the auto-invest settings updated. By January 3, their new contribution room is already working for them while everyone else is still thinking about New Year’s resolutions.

Quick-Reference: All Deadlines at a Glance

Here is your cheat sheet. Stick this on the fridge.

The Bottom Line

I know this checklist looks like a lot. But here is the truth: most of these items take less than five minutes each. The entire checklist, start to finish, can be done in about 30 minutes – probably while you are watching something on Netflix on a Sunday afternoon in November.

And the payoff is real. Maxing your TFSA every year instead of leaving room on the table could mean tens of thousands of extra dollars over your investing lifetime – all tax-free. A single smart tax-loss harvesting move could save you hundreds on your tax bill. Catching an RRSP match you almost forgot about is literally free money.

The Canadians who build real wealth with XEQT are not the ones who pick the perfect entry point or obsess over market timing. They are the ones who do the boring, unglamorous administrative work once a year to make sure every dollar is in the right account, every deadline is met, and every tax advantage is captured.

You have the checklist now. Block off 30 minutes this November or December, run through it, and head into the new year knowing your portfolio is fully optimized. Future you will be grateful – I promise.