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 12 months to contribute for the earlier tax 12 months. This implies you could have till March 1, 2023, to make an RRSP contribution and decrease your taxable earnings for the 2022 tax 12 months.
What’s an RRSP?
An RRSP is a registered financial savings account designed to assist Canadians save for retirement. You possibly can 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, which 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Investments inside an RRSP develop tax-sheltered till they’re withdrawn, at which level the funds are added to your earnings and taxed at your marginal tax fee. Sometimes, the objective is to withdraw after you retire, when you might be in a decrease tax bracket than whenever you have been incomes cash.
What’s the RRSP deadline for 2022?
Canadians have 60 days after the tip of the calendar 12 months to make RRSP contributions in the direction of the earlier tax 12 months. This implies the RRSP deadline for the 2022 tax 12 months is March 1, 2023.
Canadians who flip 71 have till December 31 of the identical 12 months to contribute to their RRSP. So, if you happen to turned 71 in 2022, you had till December 31, 2022, to contribute to your account. Seventy-one can be the age at which you could both money out your RRSP, convert it to a registered retirement earnings 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 earnings for the 2022 tax 12 months.
For those who contribute to an RRSP between January 1 and March 1, 2023, you could have two choices: You possibly can deduct these contributions out of your taxable earnings for both the 2022 or 2023 tax 12 months. 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 12 months’s RRSP deadline on March 1 can be reported in your 2023 tax return.