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RRSP Deadline & Contribution Limit 2012/2013
RRSP Deadline/Contribution Limit
For those of you coming here through Google search looking for the RRSP deadline for tax year 2012, the deadline is: March 1, 2013. Basically 60 days into the new year.
There is an abundance of choice out there for RRSP accounts, but here is a review of the best online brokers for RRSPs. 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 $22,970 (for 2012 tax year).
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:
- 2012 – $22,970
- 2013 – $23,820
- 2014 – $24,270
If you want to figure out your tax return based on your RRSP contribution, here is what you do:
- Determine your marginal tax rate based on your income and province. For me personally, my marginal tax rate is: 38.16%
- 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
- Or, you can forget the math and use an RRSP calculator that is easily found online.
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. :)
Also note that you can carry forward your tax deduction, so even if you are in a low income year, you can invest now and claim the deduction during years when income is higher.
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
36 Comments, Comment or Ping
28. Lori Scott
Just wondering why the RRSP deadline is March 01, 2011 and the T4 deadline for employers to have them in the mail is February 28, 2011…Why do they not allow a larger gap??
February 11th, 2011 at 1:12 pm
29. sunny
Hi Frugal
I have a question here:
I will contribute to my RRSP account for the first time in 2011 for the tax yr 2010. I have always leaned about the restrictions on withdrawal from RRSP and are subject to certain conditions such as first time home buyers etc.
If I choose to withdraw in futures years; accounting withdrawals as income in the corresponding tax year, whether this kind of withdrawal is allowed by CRA ??
February 19th, 2011 at 11:56 pm
30. FrugalTrader
@sunny, yes you can withdraw from your RRSP but in addition to paying tax as income,you’ll lose the contribution room. Here is an article with more details: how rrsp withdrawals work
February 20th, 2011 at 12:28 am
31. Chris
Firstly, I love your site, I’ve been following it for about 3 years now.
I typically do my taxes online before Mar 1, but don’t submit them, just see if I’ll owe or not, and if so, then I’ll purchase RRSP’s to offset that, however, I’ve always gone in to the bank to do so, if I purchase RRSP’s online (through TD Canada Trust in this case) are you typically issued all the information you need right there on the spot? So long as my purchase of an RRSP today or tomorrow counts as being purchased before March 1st, I’m happy.
Thanks,
Chris
February 27th, 2011 at 6:43 pm
32. FrugalTrader
@Chris, Thanks for the kind feedback. About your question, if you transfer money to your RRSP online, I do not believe they issue any information. You are expected to know what your contribution limits are. My understanding is that you have all day on March 1 to make your contribution.
February 27th, 2011 at 9:33 pm
33. Chris
@FrugalTrader That’s great news, thanks!
February 27th, 2011 at 10:08 pm
34. Jaden
Hey Guys,
Question, If i have unused RRSP contribution from previous years, and have cash from unregistered investments on-hand, can i dump that All In- in one year- and reclaim taxes that i have paid in the Previous 5-10 years. Or does it just lower my current years income to receive tax paid from current year. IE: May only want to lower income to lower tax bracket for this year and not wipe income out to lose tax benefit for future years.
Example; contribution limit for 2011 80,000
annual income 70,000
cash 100,000
any ideas on a good strategy? Also considering the Smith Maneuver. Good posts here on that! Thanks guys!
September 7th, 2011 at 4:19 am
35. sunny
@Jaden
As far as I know, you can dump your investment anytime into RRSP (knowing your RRSP limit) during the current year, and claim part of taxes for this year.
You cannot claim for any taxes paid in the previous year.
If you invest all of your money in one year (in rrsp), then you will likely feel the pinch on taxes in futures years
September 7th, 2011 at 1:11 pm
36. Jim Schultz
Never certain on this one .Hopefully someone can clarify. Can I use past un used contributions and then deduct this amount from my taxable income.
My notice of assessment says my 2011 deduction limit is $9224
plus
18% of earned income of $46014 = $8282 minus $3525 pension adjustment =
$4757. $9224 +$4757 = $13,981…. is this the amount Im allowed to deduct?
I always thought the maximum DEDUCTION was 18% but you could of course
contribute past amounts. Have I misunderstood this all these years? Please someone help! THANKS
November 3rd, 2012 at 3:24 am
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