What Does the RRSP Deadline Mean?
Quite simply, the “RRSP Deadline” is the last day this year that you can make a contribution to your Registered Retirement Savings Plan (RRSP) but claim the tax credit on the previous year’s taxes. The RRSP deadline for the 2014 tax year is March 2, 2015. But do you have unused RRSP contribution room?
Where to Find your RRSP Contribution Limit
Each year, after you file your income tax, you’ll receive your Notice of Assessment back from Canada Revenue Agency (CRA).
On the right is a sample of the CRA Notice of Assessment T451 for reference and placed a large green arrow pointing at the spot near the bottom of the page. Click on the image to enlarge the sample.
Sometimes I hear the comment, “If I would have known the RRSP withdrawals were taxable in retirement, I never would have started an RRSP”. Please remember, an RRSP is simply a tax deferral method. You receive a tax credit now (tax refund or reduced tax payable) when you put money in the RRSP. The basic strategy for RRSPs is to contribute in years of high income earnings since your marginal tax rate (tax rate on the last dollar earned) is highest and then withdraw at a lower rate which is typically during retirement.
For more information on RRSPs, visit the CRA site.
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