There’s one well-known exception to this rule: With registered retirement financial savings plans (RRSPs), Canadians have 60 days after the top of the calendar yr to make a contribution for the earlier tax yr. This implies you will have till midnight, 11:59 PM ET, on February 29, 2024, to make an RRSP contribution and decrease your taxable earnings for the 2023 tax yr.
What’s an RRSP?
An RRSP is a registered financial savings account designed to assist Canadians save for retirement. You may maintain money and a variety of investments (together with shares, bonds, exchange-traded funds and assured funding certificates) in your RRSP, and contributions are tax-deductible, which means they cut back your taxable earnings.
Investments inside an RRSP develop tax-sheltered till they’re withdrawn, at which level the funds are added to your earnings and taxed at your marginal tax price. Sometimes, the purpose is to withdraw after you retire, when you might be in a decrease tax bracket than while you have been incomes cash.
What’s the RRSP deadline for 2023?
Canadians have 60 days after the top of the calendar yr to make RRSP contributions in the direction of the earlier tax yr. This implies the RRSP deadline for the 2023 tax yr is midnight, 11:59 PM ET, on February 29, 2024.
Canadians who flip 71 have till December 31 of the identical yr to contribute to their RRSP. So, should you turned 71 in 2023, you had till December 31, 2023, to contribute to your account. Seventy-one can be the age at which you should both money out your RRSP, convert it to a registered retirement earnings fund (RRIF) or buy an annuity.
How do RRSP deductions work?
RRSP contributions made between March 1, 2023, and Dec. 31, 2023, could be deducted out of your taxable earnings for the 2023 tax yr.
Should you contribute to an RRSP between January 1 and March 1, 2024, you will have two choices: You may deduct these contributions out of your taxable earnings for both the 2023 or 2024 tax yr. Both approach, you’ll have to report the contributions in your 2023 tax return, however you possibly can select to hold the deductions ahead into the long run.
Any contributions you make after this yr’s RRSP deadline on February 29 will probably be reported in your 2024 tax return.
When will my RRSP tax slips be accessible?
Monetary establishments sometimes ship out tax paperwork earlier than the top of January. These tax slips embody RRSP contributions made between January 1 and December 31 of the earlier yr.