2013 RRSP DEADLINE: March 3, 2014
Dear Valued Clients,
As you are aware, RRSP Season is here. Here are some important details and information.
Your RRSP Contribution Limit for 2013
The maximum RRSP deduction limit for 2013 is $23,820 and you can carry forward the unused room from prior years.
Your RRSP deduction limit can be found on the RRSP Deduction Limit Statement which appears on your latest Notice of Assessment or Notice of Reassessment or on a T1028, Your RRSP Information for 2014.
Why contribute to an RRSP?
Most Canadians contribute to an RRSP to lower their tax bill. But there are many other benefits to consider:
Immediate tax savings:
Your allowable contributions are tax deductible from your annual income.
Tax-deferred compounding:
Your RRSP’s tax-sheltered environment maximizes the compound growth of your savings.
Retirement tax savings:
When you withdraw funds for your retirement, not only will you potentially be paying income tax at a lower rate than when you contributed, but you can also create income eligible for both Pension Income Splitting and the Pension Income Credit.
Peace of mind:
Your RRSP can supplement your retirement income so you can afford a comfortable lifestyle when you retire.
Build your retirement nest egg:
You can invest funds for your future when you can most afford it ─ during your peak earning years
Share your retirement nest egg:
You can buy RRSPs for your spouse, and even share your retirement income once you convert your RRSPs – and sharing can really lower your family tax bills
Home Buyer’s Plan:
You can withdraw up to $25,000 from your RRSP, without penalty or tax, to be applied to the purchase of your first home. You then have 15 years to repay your RRSP.
Lifelong Learning Plan:
You can use up to $20,000 of your RRSP to pay for your own or your common-law partner’s education. If certain conditions are met, the withdrawal is tax-free and can be paid back to your RRSPs over ten years.
In order to give you a basic idea about how much tax you will pay based on your Income level, listed below is the combined Ontario and Federal personal income tax rate brackets for the Year 2013:
| ON Income Tax Brackets Combined Federal and Provincial Tax Rates | |
| Taxable Income | Tax Rates |
| Up to $43,561 | 21% |
| $43,562 to $87,123 | 33% |
| $87,124 to $135,054 | 38% |
| $135,055 and Over | 42% |
Please see attached Tax Rates by Province and 2014 RRSP Checklist for additional details.
For more information on RSPs and other investment solutions, contact me today or schedule an appointment online by clicking on the Set Appointment link below.
Thank you,
Tony Miceli