With the arrival of 2019, we thought it would be useful to remind you of the contribution limits for the various registered accounts you may wish to fund.

CRA My Account

If you haven’t already done so, take the time to register for your CRA My Account.  The account allows you to track your tax refund, view or change your return, check your benefit and credit payments, view your RRSP & TFSA limits, set up direct deposit, receive online mail, and more.  Start the process or access your account here.

RRSPs

Yearly limits for RRSP contributions are equal to 18% of an individual’s earned income from the prior calendar year, subject to a maximum amount.  The RRSP contribution limit for 2018 was $26,230.  For 2019, the limit is 26,500.  The deadline for 2018 contributions is Friday, March 1st, 2019.  Unused RRSP contribution room accrues and can be carried forward into future years.  For this reason, it is important to review your most recent Notice of Assessment or your CRA MY Account to determine precisely how much you are able to contribute.

TFSAs

As of January 1, 2019, any Canadian resident who will be 18 years of age or older in 2019 gains an additional $6,000 of TFSA contribution room. Unused TFSA contribution room can be carried forward indefinitely for use in future years.

The cumulative historical contribution room available to any Canadian resident who was 18 or older in 2009 (the year that the TFSA was introduced) is now $63,500.  The TFSA contribution room for each year is set out below:

2009 – $5,000
2010 – $5,000
2011 – $5,000
2012 – $5,000
2013 – $5,500
2014 – $5,500
2015 – $10,000
2016 – $5,500
2017 – $5,500
2018 – $5,500
2019 – $6,000

In most cases, we recommend maximizing TFSA contributions to take advantage of tax free investment growth, especially since TFSA withdrawals can be made on a tax free basis at any time without any restrictions.  This said, if funds are withdrawn from a TFSA, such funds can only be re-contributed (without penalty) in subsequent calendar years.

RESPs

RESPs do not have annual maximum contribution limits, however the lifetime contribution limit for any RESP beneficiary is $50,000 (regardless of the number of RESP accounts that exist for a given beneficiary).

Many families ask us how to maximize the Canadian Education Savings Grant (CESG) available to them as the CESG basically represents a bonus contribution from the government to your RESP.  For most families, the maximum CESG that can be earned is $500 per beneficiary per annual RESP contribution (i.e. 20% of the contribution).  This level of CESG would be received by contributing $2,500 to an RESP for each plan beneficiary.

An RESP account holder can contribute up to two years’ worth of contributions in any one year to earn a maximum CESG of $1,000 per beneficiary.  It is also important to note that there is a lifetime CESG limit of $7,200 per beneficiary.  So assuming $2,500 is contributed each year for a child, the maximum CESG would be reached in the 15th year of the plan for a given beneficiary.

Tax filing deadlines

The deadline for filing individual tax returns is Tuesday, April 30th.  If you are self-employed, the deadline is Saturday, June 15th.

Please contact us with your registered account contribution instructions.