As 2025 has officially wrapped up, Canadians will begin filing their 2025 personal tax returns starting next month. With significant tax changes implemented during the year—including a mid‑year rate cut, updated tax brackets, and revised CRA procedures—now is the perfect time to get ahead of your tax planning.

Below are 10 key strategies that can help you reduce the amount of tax you owe for 2025.

1. Benefit from the 2025 Federal Tax Rate Cut

The federal tax rate for the lowest income bracket dropped from 15% to 14% effective July 1, 2025, resulting in a blended 14.5% rate for the 2025 tax year. This reduction means many Canadians will see additional savings on their 2025 return.

2. Claim the Increased 2025 Basic Personal Amount

For 2025, the Basic Personal Amount (BPA) increased to $16,129, allowing Canadians to earn more before paying federal tax. This higher threshold provides meaningful relief to lower- and middle‑income earners.

3. Maximize Your RRSP Contributions

RRSP contributions made up to the first 60 days of 2026 can still be deducted on your 2025 return. This is one of the most effective ways to directly reduce your taxable income. Deadline for 2025 RRSP contribution is March 1, 2026.

4. Use Tax-Loss Selling to Offset Gains

If you realized capital gains in 2025, consider whether selling investments with accrued losses can help offset those gains. Be mindful of superficial loss rules when repurchasing securities.

5. Take Advantage of Inflation‑Adjusted 2025 Tax Brackets

The CRA indexed tax brackets by 2.7% for 2025, increasing income thresholds across all brackets and helping keep more money in your pocket. The first bracket remains up to $57,375, taxed at the blended 14.5% rate.

6. Max Out Your 2025 TFSA Room

The TFSA contribution limit for 2025 remains $7,000. Contributions grow tax‑free, making this account a powerful long‑term tax‑planning tool.

7. Use the New Federal Top‑Up Tax Credit (2025–2030)

The mid‑year tax rate cut inadvertently reduced the value of non-refundable credits. To fix this, the federal government introduced a temporary Top‑Up Tax Credit, maintaining the 15% credit rate above the lowest bracket threshold. This enhances the value of credits such as medical expenses, tuition, and more.

8. Explore Income-Splitting Options

Reduce family‑wide tax by considering:
✔ Pension income splitting
✔ Spousal RRSPs
✔ Prescribed‑rate spousal loans

These methods shift income to the lower‑income spouse, lowering the overall tax burden.

9. Ensure You Claim All Family and Home‑Related Benefits

Depending on your situation, you may qualify for:

• Inflation‑indexed Canada Child Benefit increases effective July 1, 2025
• The Disability Tax Credit, necessary for the 2025 Canada Disability Benefit

These credits can generate substantial savings.

10. Be Aware of CRA Filing Procedure Changes for 2025 Returns

The CRA no longer mails paper tax packages automatically. If filing on paper, you must manually order or download your forms beginning January 20, 2026. Several underused schedules were also removed from the 2025 package, so make sure you have the correct forms.

Final Thoughts

The 2025 tax year brought meaningful changes and understanding them can help you reduce your taxes and avoid filing surprises. If you’d like help preparing your return or planning ahead for 2026, our team at CAPROS is here to assist.