While the New Year’s celebrations are already over, there’s still a golden opportunity waiting for you: contributing to your RRSP for the year 2023. Don’t worry if you missed the December 31st deadline. The window remains open until February 29, 2024, for you to act and reap the tax benefits.
According to the Income Tax Act, contributions you make to your RRSP during the first 60 days of the following year can be retroactively applied to the current or previous tax year. If you create a contribution before the end of February 2024, you can deduct that amount from your 2023 income.
The contribution limit for the 2023 fiscal year is 18% of the income you declared on your 2022 tax return, or $30,780, whichever is lower. However, you may have accumulated unused contribution room from previous years, allowing you to contribute more. To determine your contribution limit 2023, including any unused room, refer to your 2022 Notice of Assessment.
In summary, if you forgot to contribute to your RRSP in 2023 or if you believe an additional contribution is necessary after evaluating your total income for that year, here are the steps to follow: start by checking your 2022 Notice of Assessment to determine your contribution limit, then identify the tax bracket applicable to your 2023 income.