Important Year-end Deadlines

Quinn Waddington - Dec 20, 2016
As we near the end of 2016, the time to make contributions (or withdrawals) for the 2016 tax-year diminishes.  The three most popular accounts for investment savings are RRSPs/RIFs, TFSAs and RESPs.  All have deadlines which I will outline below.

Important Year-End Deadlines

 

As we near the end of 2016, the time to make contributions (or withdrawals) for the 2016 tax-year diminishes.  The three most popular accounts for investment savings are RRSPs/RIFs, TFSAs and RESPs.  All have deadlines which I will outline below.

 

RRSP/RIF

 

If you converted your RRSP to a RIF in 2015 or earlier, then you are required to make the minimum withdrawal by Dec. 31, 2016.  This amount is based on age and the amount of funds in your RIF at the beginning of 2016.  Your advisor will be able to help with the amount.

As for your RRSP, the deadline to contribute for the 2016 tax-year is Mar. 1, 2017.  You are able to contribute 18% of you income up to $25,370 plus any leftover contribution room you have accumulated.  If you contribute in 2017 before Mar. 2017 then you have the option to use the contribution for either 2016 or 2017. 

 

TFSA

 

You have until Dec. 31, 2016 to make a contribution or withdrawal in the 2016 tax-year.  The government will likely announce another $5,500 in contribution for 2017.  Aside from your assets not growing tax-free, there is no real down-side to missing the contribution in a TFSA as it simply adds up and is available in subsequent years.  If you are planning to make a TFSA withdrawal in the near future then it may be wise to make it in 2016 as you will be able to replace the withdrawal amount in 2017 if you wish.  If you wait to make the withdrawal until January 2017 then you will need to wait until 2018 before those funds can be re-contributed to your TFSA.

 

TFSA contribution/withdrawal rules are a bit confusing so speak to an advisor to discuss the right strategy for your situation.

 

RESP

 

RESPs are the accounts that following the calendar exactly so you have until Dec. 31, 2016 to make contributions for this year.  For each child you are able to deposit $2,500 for which the government will match 20% (more for lower income households).  If you have excess grant money from previous years then you are able to add up to another $2,500 each year until you catch up.

 

In Conclusion...

 

The holidays are already an expensive time of year for most so it can be difficult to find extra money to make RRSP, TFSA and RESP contributions.  For this reason you are almost always wiser to make monthly contributions throughout the year.

 

Contact me today and we can put together a Financial Plan, including a savings strategy that will make sure you are on track to meet your objectives. 

quinn.waddington@canaccord.com or (604) 643-0874

 

Happy Holidays!!