It is that time of year again, you have the opportunity until March 2, 2020 to still contribute to your RRSP (Registered Retirement Savings Plan) and count towards the previous 2019 tax year.
RRSP annual contribution limit
Your annual RRSP contribution limit is calculated based on 18% of the earned income you reported on your tax return in the previous year, up to a maximum amount stipulated by CRA (The Canada Revenue Agency). The maximum annual contribution for the 2019 tax year is $26,500.
What if I have unused RRSP contribution room from prior years?
Each year you report earned income on your taxes to CRA, RRSP contribution room is created. If do you not contribute the full amount to your RRSP in that year, the RRSP contribution balance carries forward and you can contribute in a future year.
How much can I contribute?
If you have available contribution room from previous years your RRSP contribution limit may be different from the annual limit. You can check your RRSP contribution limit by visiting My Account on the CRA website (link). It is important to not over contribute as generally CRA charges a 1% monthly penalty on contributions that exceed your limit by more than $2000.
When is the deadline for the 2019 tax year?
If you want to make an RRSP contribution for the 2019 tax year you have until March 2, 2020 to do so, after that the contribution would count for the next year.
Contact us with any questions you have, we can provide you answers.