RRSP or TFSA

March 2, 2015 is the deadline for Registered Retirement Savings Plan (RRSP) contributions that qualify for deduction on your 2014 tax return. Several clients have contacted me recently to confirm their 2014 contribution limit or to discuss whether it is prudent for them to contribute to an RRSP. If we have authorization to contact CRA on your behalf, we can confirm your confirmation limit, but many of our clients aren't aware that all Notices of Assessment report the RRSP contribution limit for the following year, so the information is readily available to them (I am assuming that all my clients retain their Notices of Assessments).

For many taxpayers, RRSP contributions are a wise decision. But for some taxpayers, they aren't. For example, someone with credit card debit or high interest loans, is wiser to pay down those debts rather than contributing to an RRSP. RRSP contributions are most beneficial to taxpayers that are currently in a higher tax bracket than they will be after they retire, when they withdraw from their RRSP. For some taxpayers, the Tax Free Savings Account (TFSA) may be a wiser choice. If you would like to discuss the tax benefits of either program, feel free to contact my office