There’s one well-known exception to this rule: With registered retirement savings plans (RRSPs), Canadians have 60 days after the tip of the calendar yr to contribute for the earlier tax yr. This implies you’ve got till midnight, 11:59 PM ET, on February 29, 2024, to make an RRSP contribution and decrease your taxable earnings for the 2023 tax yr.
What’s an RRSP?
An RRSP is a registered financial savings account designed to assist Canadians save for retirement. You’ll be able to maintain money and a variety of investments (together with stocks, bonds, exchange-traded funds and guaranteed investment certificates) in your RRSP, and contributions are tax-deductible, that means they scale back your taxable earnings.
Investments inside an RRSP develop tax-sheltered till they’re withdrawn, at which level the funds are added to your earnings and taxed at your marginal tax rate. Sometimes, the objective is to withdraw after you retire, when you could be in a decrease tax bracket than whenever you have been incomes cash.
What’s the RRSP deadline for 2023?
Canadians have 60 days after the tip of the calendar yr to make RRSP contributions in the direction of the earlier tax yr. This implies the RRSP deadline for the 2023 tax yr is midnight, 11:59 PM ET, on February 29, 2024.
Canadians who flip 71 have till December 31 of the identical yr to contribute to their RRSP. So, for those who turned 71 in 2023, you had till December 31, 2023, to contribute to your account. Seventy-one can also be the age at which you could both money out your RRSP, convert it to a registered retirement income fund (RRIF) or buy an annuity.
How do RRSP deductions work?
RRSP contributions made between March 1, 2023, and Dec. 31, 2023, might be deducted out of your taxable earnings for the 2023 tax yr.
Should you contribute to an RRSP between January 1 and March 1, 2024, you’ve got two choices: You’ll be able to deduct these contributions out of your taxable earnings for both the 2023 or 2024 tax yr. Both approach, you’ll have to report the contributions in your 2023 tax return, however you’ll be able to select to hold the deductions ahead into the longer term.
Any contributions you make after this yr’s RRSP deadline on February 29 will probably be reported in your 2024 tax return.
When will my RRSP tax slips be accessible?
Monetary establishments sometimes ship out tax paperwork earlier than the tip of January. These tax slips embrace RRSP contributions made between January 1 and December 31 of the earlier yr.
