Neepawa Income Tax (1997)

"You have a friend who does taxes"

Tax Discussions

Blog

RRSP Season… or is it?

Posted on February 18, 2013 at 11:49 AM
 
 
Wow! February already and the RRSP purchase deadline for 2013 is fast approaching. This deadline for those under 69 is March 1 this year, 60 days after the end of the tax year.
 
RRSPs can save you money by deferring the taxes that would be owed on the amount of RRSP purchased. Simply put if you are in a 40% tax bracket, a $1000 RRSP purchase will save you $400 in taxes for that tax year. Purchased before February 29, the tax savings can be used in the previous tax year. There are other considerations depending on the individual or family circumstances, but overall that’s the drift.
 
Most of us are divided into "Working Guy” (or Gal) who trudges off to work each day, “Family Guy” who deals with life’s little emergencies, and occasionally “Tax Savings Guy”. Now Tax Savings Guy usually appears for only one week a year, scrambling at the last minute to squeeze what little tax advantages he can find to ease the cost of living and maybe even save a little something for retirement.
 
Many will tell Tax Savings Guy that this is the time to buy RRSPs. Buy Now…Save Taxes…Maximize Your Tax Return!! In fact this is reinforced at every bank and credit union. They are busy right now advertising special rates for RRSPs or even RRSP loans. Last Chance to Save! Borrow Money to Save Money! Rates so low it’s almost FREE!!
 
So how about that? Is it RRSP Season? Should we buy now to save on last year’s taxes? I say no. Purchasing now can actually HURT you financially.
 
Now, you should always buy RRSPs if it is beneficial to your individual tax situation, such as in a higher tax bracket. How much to purchase would be determined by where your income is within that bracket and by the eligible RRSP amount listed on the bottom of last year Notice of Assessment from the Canada Revenue Agency (CRA). However, it is not always wise to borrow now and pay all year for last year’s loan. Tax Savings Guy would be better off ignoring last year and focusing on being around more this year. The money that would have been set aside to pay off last year’s loan could instead purchase NEWRRSPs for the present tax year.
 
Knowing your RRSP eligible room, Tax Savings Guy can arrange an automatic withdraw from each paycheque to make RRSP purchases. This way he is ahead of the game. He is purchasing this year’s RRSP as well as value averaging the purchase of any mutual fund, stock, or GIC that is being purchased. But the big score is he is not paying interest. As well, the additional tax refund can be used for anything and not just to repay a RRSP loan such as paying down mortgage or credit card debt. Granted he could give the money to Family Guy who never seems to have enough. The point is money is saved, not borrowed. Interest is made, not paid.
 
So forget about the hype. Remember… RRSP Season is All Year Long!! Retirement Guy will thank you for it.

Categories: RRSP

Post a Comment

Oops!

Oops, you forgot something.

Oops!

The words you entered did not match the given text. Please try again.

30 Comments

Reply Small business loans
7:47 AM on March 31, 2013 
This post is really gathered some massive information about tax.
I read your post carefully and i think this topic is really useful to me. Lot of thanks for your vital information sharing.
Good job.
Reply Itesulp
6:35 PM on June 15, 2021 
priligy from india
Reply Hedecheby
10:58 PM on August 27, 2021 
cialis without a prescription
Reply Propecia
3:37 PM on August 29, 2021 
Kamagra Ajanta Pharmaceuticals
Reply SenSpeelp
10:10 PM on August 30, 2021 
https://buystromectolon.com/ - stromectol walmart
Reply Swancen
4:04 PM on August 31, 2021 
http://buytadalafshop.com/ - cialis for sale
Reply duettrole
12:41 AM on September 1, 2021 
Propecia
Reply Hatamitty
8:33 PM on September 5, 2021 
Stromectol
Reply unlaxia
12:23 AM on September 6, 2021 
Reply is there a legitimate canadian pharmacy where i can buy stromectol online
8:18 AM on September 6, 2021 
Online Rx
Reply Cialis
7:16 AM on September 7, 2021 
Cialis 20 Mg Prezzo Farmacia
Reply battGrash
10:56 PM on September 14, 2021 
lasix over dose
Reply Adjumbmib
2:11 AM on September 15, 2021 
Plaquenil
Reply Zithromax
3:24 PM on September 16, 2021 
Viagra Feminino
Reply Ethespent
3:59 AM on September 18, 2021 
http://buyplaquenilcv.com/ - plaquenil rash
Reply ovebmag
5:42 AM on September 18, 2021 
Reply PourryFuh
8:54 AM on September 18, 2021 
Zithromax
Reply Relsmeeta
6:47 AM on September 20, 2021 
http://buyzithromaxinf.com/ - azithromycin 250
Reply phebmax
11:42 AM on September 20, 2021 
Priligy
Reply Priligy
8:00 PM on September 20, 2021 
Support
0