Canada Revenue Agency (CRA) My Account
If you haven’t already done so, we recommend taking the time to register for your CRA My Account. The account allows you to manage virtually all your tax affairs online. Benefits include tracking tax refunds, viewing or amending prior years’ returns, checking benefit and credit payments, viewing available RRSP & TFSA contribution limits, setting up direct deposit, receiving online mail, and more. Start the process or access your account here.
2020 Tax Filing Deadline
The deadline for filing individual tax returns is Friday, April 30, 2021. If you are self-employed, the deadline is Tuesday, June 15, 2021. See other related filing and payment deadlines here.
Registered Retirement Savings Plans (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 2020 was $27,230. For 2021, the limit is 27,830. The deadline for 2020 contributions is Monday, March 1, 2021. Unused RRSP contribution room accrues and carries 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 exactly how much you may contribute.
Tax Free Savings Accounts (TFSAs)
As of January 1, 2021, all Canadian residents 18 years of age or older in 2020 gain an additional $6,000 worth of TFSA contribution room. Unused TFSA contribution room accrues and carries forward into future years. Again, it is best to review your CRA My Account to determine exactly how much you may contribute.
The cumulative historical contribution room available to any Canadian resident who was 18 or older in 2009 (the year that TFSAs were introduced) is now $75,500.
In most cases, we recommend maximizing TFSA contributions to take advantage of tax free investment growth, especially since TFSA withdrawals can be made at any time without restriction or penalty. Remember though, if funds are withdrawn from a TFSA, such funds may only be re-contributed in subsequent calendar years.
Registered Education Savings Plans (RESPs)
RESPs do not have a maximum annual contribution limit, however the lifetime contribution limit for any one RESP beneficiary is $50,000.
To maximize the Canadian Education Savings Grant (CESG), RESP account holders should contribute $2,500 annually to the RESP for each plan beneficiary. This will earn the maximum $500 Canada Education Savings Grant (CESG) — 20% of the contribution.
If ‘catch-up’ contributions are needed, RESP account holders may contribute an extra $2,500 per year, per beneficiary, to capture one year’s worth of missed CESG ($500).