RRSP Planning - The #1 Way Every Canadian can Save on Their Taxes

RRSP contributions are amazing for a number of reasons.

• They give you a dollar for dollar tax deduction on your return which lowers your taxable income & can even drop you into a lower tax bracket.

  
  

• The money inside can be invested in stocks, bonds, ETFs etc. and all the money earned is tax free.

  
  

• You can leverage the money inside for a down payment on your first home and to help you go back to school

  
  

• They are the only thing you can do once the year ends to change your tax return

I've said it before and I'll say it again, RRSPs are the number one way EVERY Canadian can reduce the amount of tax they have to pay.

Let's revisit my last point, RRSP contributions are the only thing you can do once the clock strikes midnight on New Year's Eve to change your previous year's tax return.

They always remind me of the magic of Cinderella, your last chance to make a change before turning into a pumpkin.

Everything else on our tax return runs on the calendar year from January 1st to December 31st. RRSP contributions are the only thing that differs and they run from 61 days into the tax year to 60 days into the current year unless the deadlines fall on a weekend.

The deadline to contribute to your RRSP and have it count on your 2024 taxes is March 3rd, 2025.

This is incredible since, as I mentioned, you can use RRSPs for a dollar for dollar tax deduction. This helps by lowering your taxable income and therefore lowering your tax payable. It can even drop you into a lower tax bracket.

This is great but what now? Do I just guess and dump a random amount of money into my RRSP? Well, no, I'd never recommend just blindly contributing to your RRSP and hoping for the best 🤞.

I would first find out what my current tax situation looked like before contributing and then run different RRSP scenarios to see what the return would be if I contributed different amounts.

This way I could find out if I had a balance owing and how much I would need to contribute to either reduce that or get rid of it altogether.

I can also see if I've just tipped over to a higher tax bracket. Then I can choose to contribute the amount I'm over into my RRSP to drop me down into a lower tax bracket.

By doing a mock return and running these calculations this allows me to make an informed choice and be much more strategic with my financial decisions.

Complimentary RRSP Scenario Calculations

From January 1st to February 20th I offer complimentary RRSP scenario calculations for my clients to help with tax & RRSP planning. Even if you do not have your tax slips yet I can use your last pay stubs to do a mock return and then run different RRSP calculations for you.

After I complete my calculations I send an email with a full breakdown of my findings to you. This will allow you to make an educated decision if you want to contribute to your RRSP before the deadline and if so, how much.

For more information about this please email me or fill out the the contact form at the bottom of the page. To start this process book a Zoom call with me. Go to the booking calendar and select Personal Tax Filing.

It's important to note that I am not a financial advisor and this is not financial advice. It's important to meet with a Certified Financial Planner (CFP) to discuss your specific situation and your goals.