March 3 – RRSP Contribution Deadline

Don’t forget the RRSP contribution deadline of March 3, to maximize your 2013 RRSP deduction and reduce net and taxable income.

Doing so will help you reduce your taxes and may increase your social benefits and refundable credits, depending on your net family income. 

Check out your unused RRSP contribution room first. You will find this on your Notice of Assessment from last year or Reassessment. Any RRSP contributions made in the first 60 days after the tax year can be deducted on Line 208 of the T1 in either the prior tax year (2013 in this case) or the year of contribution (2014). For 2013 only, enter any PRPP (Pooled Retirement Pension Plan) contributions you made in January or February 2013 as these could not be entered on your 2012 return. 

The tax deductible amounts will show up in two places on your return: Schedule 7, and Line 208. Employer contributions to PRPPs must be listed on new line 205 on the 2013 tax return. Note that PRPP contributions will reduce your RRSP contribution room next year.

Here’s an example: Thomas contributed $5,000 to his RRSP last year because he had some extra money, but it turned out that he didn’t need to claim the deduction. He carried forward the undeducted contributions and plans to deduct them this year.

Now start saving tax dollars for 2014: make the RRSP contribution based on your 2013 earned income as soon as possible. Take this tax deductible amount into account when setting up your tax withholdings at source with your employer or your quarterly instalment remittance payments.