The beginning of a new year is often the time that individuals consider making RRSP contributions for the previous or current tax year as well as making TFSA contributions for the current year. If this is something you are contemplating, here is some information you should be aware of.

Important Registered Retirement Savings Plan (RRSP) information

The RRSP deadline for contributing for the previous calendar year is March 1, 2018

The maximum amount is determined as follows:

• 2017: 18% of previous year’s earned income up to $26,010.
• 2018: 18% of previous year’s earned income up to $26,230.
  • + Plus Pension Adjustment Reversal (PAR) for terminations in current or previous year
  • + Plus Unused deduction room earned in previous years
  • - [Minus] Previous year’s Pension Adjustment (PA)
  • - [Minus] Current year’s Past Service Pension Adjustment (PSPA)
• Your personal RRSP deduction limit is found on your RRSP Deduction Limit Statement provided by the CRA on your most recent Notice of Assessment.
• To qualify as a 2017 deduction, contributions to your own or to a spousal RRSP must be made on or before Thursday, March 1, 2018.

2018 Tax Free Savings Account (TFSA) Limit

If you have previously fully utilized your TFSA contribution room, the maximum amount you can contribute into a TFSA in 2018 is $5,500 as the annual TFSA dollar limit remains unchanged.

Important TFSA Information

• The 2018 TFSA dollar limit for an individual age 18 or over is $5,500.
• If you have been both a Canadian resident and over the age of 18 since 2009, and have never made a TFSA contribution, you would be able to contribute $57,500 to your TFSA.
• Otherwise, if you are 18 years of age or older and a Canadian resident, your individual contribution room is calculated as follows:
  • The annual TFSA dollar limit ($5,500 for 2018); plus
  • Any unused TFSA contribution room from the previous year; plus
  • Total amount of withdrawals from TFSAs in the previous year (excluding qualifying transfers and withdrawals of TFSA “excess”).

You can request your individual TFSA contribution room by calling 1-800-267-6999 or by logging into MyCRA. In the coming weeks, ATB Financial will be listed as a SecureKey partner for you to easily log into your CRA account. Stay tuned for more information on this.

A TFSA contribution does not result in a tax deduction. The benefit of saving in a TFSA is that investors can grow their money without paying taxes on interest, dividends or capital gains earned within the account. Get in touch with an ATB Financial Advisor near you to learn how you can best use your TFSA and RRSP​ to help reach your financial goals.