The RRSP deadline is March 2, 2015. But what does that mean for you?
RRSPs differ from most other tax credits and deductions in one big way: contributions made in the first 60 days of this year can be claimed on last year’s tax return. If you have a bit of money available to invest, this “retroactive tax planning” can be quite useful to increase your refund or decrease your balance. Next Monday, the RRSP deadline, is the last day you can contribute to your RRSP and report it on your 2014 tax return.
Once you’ve mostly completed your return, SimpleTax can help you figure out how much you’ll need to contribute to your RRSP to maximize your refund or eliminate your balance.1 Here’s a link to our detailed post on how to use our RRSP calculator.
You can also use SimpleTax to figure out the impact that a potential RRSP contribution will have on your balance or refund. To do this, enter a tentative contribution in the RRSP section; just remember to remove it if you don’t end up making a contribution. In the example below, a contribution of $2,000 would decrease my balance owing by about $600. Hooray!
There are a myriad of things to think about when planning for your retirement. While the tools in SimpleTax won’t address those concerns, they will come in handy once you’ve decided RRSPs are right for you.
1 If you’re required to make repayments under the Home Buyers Plan or the Lifelong Learning Plan, be sure to enter those contributions and designate them as repayments before using the calculator.