You can make contributions to your RRSP all year long–but in order for them to count towards your 2022 tax return and lower your overall taxable income for last year: you need to make contributions before March 1st, 2023. Here’s what you need to know to make that happen:
Know how much you can contribute.
Everyone’s contribution room is different because it’s based on your income.
In general, you can contribute up to 18% of your earned income. But it’s always a good idea to double-check your available contribution room through your CRA account to make sure you don’t over contribute. And remember to account for any RRSP contributions from your employer or payroll deductions.
Consider an RRSP Loan.
if you’re still recovering from the holidays and you’re a little short on cash for your contribution an RRSP loan can help you put money in your pocket at a low-interest rate. While it may feel funny to get a line of credit to invest, a little number crunching will show that it can actually help you get ahead. Talk to us to see if this is something you should consider.
Know the deadline for making your RRSP contribution.
Repeat it three times: March 1, March 1, March 1. Mark it in your calendar, set up a phone reminder or hire an airplane to fly a banner over your house. March 1 is the deadline to make your RRSP contributions for your 2022 tax year. Give us a call or book an appointment and we’ll help you get it done.
Make it easy.
It’s hard to make investment decisions on the fly, especially with the contribution deadline looming. Luckily, we’ve got your back. You can make your contribution right into our Park-It RRSP GIC. Like the usual GIC, it gives you a guaranteed interest rate. What makes it special is that you can reinvest it in something else later. Think of it as a short-term investment solution where you can earn interest for a while until you decide how to optimize it.
Automate it for next year.
Ease the stress of having to make one big RRSP contribution by setting up a pre-authorized credit or recurring automated transfers. Check your budget to see what you can afford, and set it up to be automatically transferred to your RRSPs after each paycheque. Don’t worry about starting big—even a little adds up over time. If you start doing this today then by next February you’ll forget what the last-minute crunch felt like.
Now that you’re prepped with what you need to know to make your last-minute RRSP contribution, connect with us and we’ll help you out.
