Tuesday, 2 February 2016

RRSP Contribution Deadline is Fast Approaching

Ok guys, it's February...how the heck did that happen! That means that the RRSP deadline is coming up quick so let's make sure you've got your contributions ready to roll. 

The deadline this year is actually February 29, 2016. Usually it falls on March 1st but the rule is actually the first 60 days of the year and because we're in a leap year it gets bumped up a day. Keep that in mind and don't be the person that shows up at your advisor's office with a cheque on March 1st, or be even more awesome and get it done early this month ;) 

If you need some help figuring out how much you can contribute to your RRSP you are going to want to grab your Notice of Assessment from last year. Got it? Look for that number in the little red box: 

That will be the maximum amount you can deposit for year. If you contribute regularly to an RRSP throughout the year you'll also want to figure out how much you've already deposited. If you've got some extra cash and also some extra room you can go ahead and top up your RRSP. 

If you're one of the rest of us who has more room than you have money don't fret, you'll never lose that room and you can always pay catch up down the road when you're earning the big bucks! 

You may also be wondering if an RRSP is the best place for you to be saving money, if that's your mindset right now then you should check out this post to help you decide. 

RRSP contributions are a great way of decreasing your tax bill if you're going to owe a chunk of money or maybe even get you into the refund category. If you want to see what impact a contribution will make to your refund TurboTax has a good basic calculator here. This is a great resource to take advantage of and get a good estimate of how much money you will get or owe when you file. 

Another thing that's important to remember is making sure you are on top of your contributions if you've pulled money out for the Home Buyer's Plan. I talk more about the HBP here but it basically let's first time home buyer's pull money out of their RRSP tax free to buy a house. You do have to repay this amount over the next 15 years and these don't count as regular RRSP contributions (it's a repayment, you already got the tax break on it the first time around). To find out how much you have to repay you will want to pull out that handy Notice of Assessment again and you'll find a page listing how much you have to pay back each year. 

Any questions? Let me know in the comments below and if you're looking to get a head start on your 2016 RRSP contributions, my best tip is to set-up a regularly monthly deposit so you don't feel as much pressure to scrounge up the money this time of year. 

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