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RRSP Deadline/Contribution

For those of you coming here through Google search looking for the RRSP deadline for tax year 2009, the deadline is: March 1, 2010.  Basically 60 days into the new year.

If you’re not sure if RRSPs are right for you, check out my article on “Who Should Contribute to an RRSP?“.

Also note that your RRSP contribution limit should be on last years Notice of Assessment (NOA) or 18% of your last years earned income up to a maximum contribution of $18,000.

If you don’t have your NOA, then you can call Canada Revenue Agency (CRA) and they will determine your limit after a bunch of security questions. CRA also has a free online service that enables you to access your RRSP contribution limit information online. Remember that unused contribution room from previous years can be carried forward.

Here are the RRSP contribution limits for future years:

• 2007 – $19,000
• 2008 – $20,000
• 2009 – $21,000
• 2010 – $22,000

If you want to figure out your tax return based on your RRSP contribution, here is what you do:

1. Go to taxtips.ca and determine your marginal tax rate based on your income and province. For me personally, my marginal tax rate is: 38.16%
2. Multiply your total contribution for the year by your marginal tax rate and voila, you will have your approximate RRSP tax refund. Example: In 2006, I contributed around $6000 to my RRSP, so I should get approximately: $6000 x 38.16% = $2289.60
3. Or, you can forget the math and use the RRSP calculator that is provided on taxtips.ca (select your province first).

Before you go running to the bank, remember, you don’t have to rush into an investment immediately. You can simply deposit money into your RRSP account, park it in a money market fund, then decide which investments to go with later. Now.. run to the bank. :)

You might also be interested in the articles:

• Who Should Contribute to an RRSP?
• RRSP vs. Mortgage
• How Spousal RRSPs Work
• How the RRSP Home Buyers Plan (HBP) Works
• TFSA vs RRSP