Koroll & Company Blog

It’s time to finalize your 2017 taxes and start planning for 2018. As with every new year, 2018 has its own set of payment and filing deadlines that every taxpayer needs to know about.

Below is a listing of significant dates and information that you will want to make note of.

RRSP Contributions

RRSPs can be a great tool for reducing your tax owing.

Unlike other tax planning tools, you can utilize your RRSP until March of the following year. As such, the RRSP contribution deadline for your 2017 tax return is March 1, 2018, unless you turned 71 in 2017. In that case, you RRSP contribution deadline was December 31, 2017.

We often discuss the benefits of Tax-free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs), as both tax planning and retirement saving tools.

There’s little likelihood that the average Canadian taxpayer can fail to notice that it is, once again, registered retirement savings plan (RRSP) season, given the number of television, radio, and online RRSP-related advertisements and reminders which invariably appear at this time of year. This year taxpayers must, in order to deduct an RRSP contribution on their income tax return for 2016, make that contribution on or before Wednesday, March 1, 2017. The maximum allowable current year contribution which can be made by any individual taxpayer for 2016 is 18% of that taxpayer’s earned income for the 2015 year, to a statutory maximum of $25,370.

Each new tax year brings with it a new list of tax payment and filing deadlines, as well as some changes with respect to tax planning strategies. Some of the more significant dates and changes for individual taxpayers for 2017 are listed below.

Most Canadians are aware that the deadline for contributing to one’s registered retirement savings plan (RRSP) is 60 days after the calendar year end – in order to be claimed on the return for 2016, such contributions must be made before March 2, 2017. Many also know that contributions to a tax-free savings account (TFSA) can be made at any time during the year. Consequently, when Canadians start thinking about year-end tax planning or saving strategies, RRSPs and TFSAs aren’t often top of mind. The fact is, however, that there are some situations in which planning strategies involving TFSAs and RRSPs must be put in place by the end of the calendar year. In other situations, acting before the end of the calendar year, while not required, will produce a better tax result. Some of those situations are outlined below.

When it comes to questions around personal finance, two issues tend to dominate current discussions. The first is whether and to what extent Canadians are financially prepared for retirement, and the second is the seemingly inexorable increase in the value of residential real estate. For many retired Canadians, those two issues are very much interlinked. 

Most Canadians are eligible to receive Canada Pension Plan(CPP) and Old Age Security (OAS) payments in retirement. While those two programs provide the “backbone” of retirement income in Canada, they are almost never enough, on their own, to provide for a comfortable standard of living in retirement.

By now, most Canadians are familiar with the use and the benefits of a tax-free savings account (TFSA), which has proven to be a very popular savings vehicle since TFSAs were introduced in 2009. What’s been harder has been keeping track of one’s annual TFSA contribution limit.

The annual TFSA contribution limit allowed by law has been something of a moving target, subject to change after change by successive governments. As well, withdrawals made from a TFSA are added to one’s annual contribution limit, but not until the following taxation year – a fact that has escaped many TFSA holders and sometimes even their financial advisers. And finally, the Canada Revenue Agency (CRA) used to provide information on a taxpayer’s current year TFSA contribution limit on the annual Notice of Assessment, but that’s no longer the case, meaning that the taxpayer has to make an extra effort to obtain that information.

Millions of Canadians receive Old Age Security (OAS) benefits, meaning that millions of Canadians may be subject to the OAS “recovery tax” or, as it is more commonly referred to, the clawback. Unfortunately, very few Canadians are familiar with that tax or how it works, and even fewer incorporate the possibility of having to pay the tax into their retirement income planning. There are, however, strategies which allow taxpayers to minimize or avoid the OAS clawback in retirement.