Tax season is upon us and we would like to remind everyone that the due date to file your taxes is April 30, 2012. The deadline to contribute to RRSPs is February 29th 2012. Yes, that’s in a few days! Did you buy an RRSP this year? Here is some general information about RRSPs.

What’s an RRSP?

For those who aren’t familiar with RRSPs, the acronym stands for Registered Retirement Savings Plan. Buying an RRSP helps Canadians reduce or defer the amount of income taxes they pay. Each working individual has a calculated limit to how much money they can contribute to RRSPs which is based on the previous year’s earned incomes. You can purchase above and beyond the calculated limit but will be required to pay a penalty on the amount above and beyond the limit.

Who Should Contribute to an RRSP?

My personal banking officer believes that anyone who is currently employed who expects to be in a lower tax bracket after retirement should consider contributing to RRSPs as soon as possible. There are different options that banks or online service providers can offer you and some do not charge taxes. Those looking into purchasing their first home can also use their RRSPs to assist with the down payment. For more information speak to your bank or mortgage broker.

If you have questions or want more information about RRSPs, we would suggest you contact a financial professional or institution.

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