There’s one well-known exception to this rule: With registered retirement financial savings plans (RRSPs), Canadians have 60 days after the tip of the calendar yr to make a contribution for the earlier tax yr. This implies you may have till March 1, 2023, to make an RRSP contribution and decrease your taxable revenue for the 2022 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 shares, bonds, exchange-traded funds and assured funding certificates) in your RRSP, and contributions are tax-deductible, that means they scale back your taxable revenue.
Investments inside an RRSP develop tax-sheltered till they’re withdrawn, at which level the funds are added to your revenue and taxed at your marginal tax fee. Usually, the aim is to withdraw after you retire, when chances are you’ll be in a decrease tax bracket than once you had been incomes cash.
What’s the RRSP deadline for 2022?
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 2022 tax yr is March 1, 2023.
Canadians who flip 71 have till December 31 of the identical yr to contribute to their RRSP. So, when you turned 71 in 2022, you had till December 31, 2022, to contribute to your account. Seventy-one can be the age at which you should both money out your RRSP, convert it to a registered retirement revenue fund (RRIF) or buy an annuity.
How do RRSP deductions work?
RRSP contributions made between March 2, 2022, and Dec. 31, 2022, may be deducted out of your taxable revenue for the 2022 tax yr.
When you contribute to an RRSP between January 1 and March 1, 2023, you may have two choices: You’ll be able to deduct these contributions out of your taxable revenue for both the 2022 or 2023 tax yr. Both manner, you’ll have to report the contributions in your 2022 tax return, however you may select to hold the deductions ahead into the longer term.
Any contributions you make after this yr’s RRSP deadline on March 1 will likely be reported in your 2023 tax return.
