Tax Preparation
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      The Optimize Financial Compass

      Charting a Course Towards Success. Tax Year 2024

      RRSP and TFSA Limits

      RRSP / RRIF

      RRSP Maximum annual deduction limit.
      • 18% of the prior year’s earned income to a maximum of.
      • $31,560 for 2024 - Deadline March 3rd, 2025

      • $30,780 for 2023 - Deadline February 29th, 2024

      • Age limit: RRSP contributions can be made until December 31st in the year the individual turns 71.

      • Carry forward: Unused contributions can be made until December 31st in the year the individual turns 71. The total allowable carry forward contribution can be found on an individual’s most recent notice of assessment. 

      • Over- contribution: Individuals over 18 can maintain an over-contribution of $2,000 in an RRSP at any time.

      • Penalty: The penalty for over-contribution over $2,000 is 1% per month, starting at the end of the first month in which the limit has been exceeded.

      SPOUSAL RRSP / RRIF

      Spousal RRSP/RRIF Attribution.
      • Main advantage: opportunity for income splitting at any age and not limited to 50%

      • Contributor claims tax deductions, but the spouse or common-law partner who owns the plan makes all the investment decisions and is the legal owner.

      • Clients over age 71 wo have available contribution room can contribute to a spousal RRSP if their spouse is under 71.

      • Attribution will apply on withdrawals made from a spousal plan if there were any contributions made by the spouse in the current calendar year or previous two calendar years.

      TFSA

      Maximum annual contribution limits
      • $5,000 each year 2009 - 2012
      • $5,500 each year 2013 - 2014
      • $10,000 for 2015
        $5,500 for 2016 - 2018
      • $6000 for 2019 - 2022
      • $6500 for 2023
      • $7,000 for 2024

      Maximum contribution limit since inception

      $95,000 from 2009 - 2024 if born in 1991 or earlier and resident of Canada during those years.
      •  Unused contribution room can be deferred to future years.
      • Withdrawals can be re-contributed starting the following year.

      Income Tax withholding rates on RRSP Withdrawals

      Withholding tax on RRSP withdrawals or payments over the annual minimum for a RRIF

      Amount

      All provinces except Quebec

      Quebec

      $0-$5,000

      10%

      19%

      $5,001 - $15,000

      20%

      24%

      Over $15,000

      30%

      29%

      RRSP Withdrawal Programs

      Eligibility

      RRSP Home Buyers’ Plan (HBP)

      RRSP Lifelong Learning Plan (LLP)

      Must be considered a “First-time Home Buyer”. Cannot have lived in a home owned by the annuitant or the annuitant’s spouse or common-law partner during the period between January 1st of the fourth year before the year of withdrawal, and the 31st day before the withdrawal. Other conditions apply.

      The annuitant or the annuitant’s spouse or common-law partner must be enrolled full-time (part-time for students meeting one of the disability conditions) in a qualifying educational program or have a written offer to enrol at a designated educational institution before March 1st of the year following the year of first withdrawal. The program must be of at least three consecutive months duration with 10+ hours of weekly course work. Other conditions apply.

      Limits

      $35,000 per participant

      $10,000 per year to a maximum of $20,000 over four years

      Repayment*

      Generally, 1/15th per year beginning the second year following the year of withdrawal, payable by 60 days into the following year

      Generally, 1/10th per year, with the first repayment due 60 days after the 5th year following the first withdrawal. Repayments may commence in the second year following the withdrawal, if the course is completed in the year of withdrawal.

      For complete details on the above programs please go to www.canada.ca/en/revenue-agency.html
      * Any amount that is not repaid will be added to taxable income for the year the repayment is due. You have up to 15 years to repay the Home Buyers’ Plan and up to 10 years to repay the Lifelong Learning Plan.

       

      *Home buyers’ amount: Did your client buy a home? They may be able to claim up to $5,000 of the purchase cost, and get a non-refundable tax credit of up to $750. (Legislation is pending that would double the amount to $10,000 for a non-refundable tax credit of up to $1,500.)

      RRIF and LIFF Withdrawals

       

      Registered Retirement Income Funds

      • An RRSP must mature no later than December 31st of the year in which the RRSP annuitant turns 71.
      • The RRSP can be cashed in, annuitized or as more commonly done, converted to a RRIF/LIF.

      Minimum annual withdrawals

      • To determine the minimum amount that must be withdrawn from a RRIF in a given year for a specific annuitant, multiply the January 1st fair market value of the RRIF by the factor associated with the annuitant’s age on January 1st.
      • Clients can opt to use the age of their spouse or common-law partner if
        this election is made before the first withdrawal. No minimum withdrawal is required in the year a RRIF is established. To maximize tax-deferred growth in the RRIF, set up withdrawals to occur on December 31st. While RRIFs have a minimum that must be withdrawn in a year, there is no maximum.

      Withholding Taxes

      • Funds withdrawn from a RRIF or LIF will be taxed at your marginal tax rate when you file your tax return. Minimum annual withdrawal amounts fromRRIFs or LIFs are not subject to withholding taxes. For amounts withdrawn over RRIF/LIF minimums, withholding taxes will apply.
      • For non-residents, withholding tax is 15% on the full amount up to double the minimum, and 25% thereafter.

      Note: Quebec, Alberta, Manitoba, New Brunswick & British Columbia pension legislation permits LIF clients who begin a LIF in the middle of a calendar year with funds transferred from a LIRA or pension plan to take the FULL maximum payment for the year. First year payments under the other jurisdictions must be prorated based on the number of months the LIF was in force.

       

      1. Ontario New LIF, Ontario Old LIF, Ontario LRIF

        maximum calculation is based on the greater of a) the result using the factor and b) the previous year’s investment returns.

      2. Saskatchewan and Newfoundland LIFs must be converted to a life annuity at age 80.

      3. British Columbia LIF maximum calculation is the greater of 1) the result using the applied factors and 2) the previous year’s investment returns under the same LIF contract.

      4. Alberta LIF maximum calculation is based on the greater of 1) the result using the new factors or 2) the previous year’s investment returns.

      5. Manitoba LIF maximum calculation is based on the greater of a) the result using the factor and b) the previous year’s investment returns + 6% of the value of all transfers in from a LIRA or Pension Plan during the current year.

       

      RESP Information

      Registered Accounts and Pension Information

      * For 2024, the maximum pensionable earnings amount is $68,500 (up from $66,600 in 2023), and the basic exemption amount remains $3,500 for 2022 and 2023.

       

      * For more information on the OAS Allowance, please refer to your accountant or the Government of Canada website.

      Important Personal Tax Information

      * The federal basic/spouse/common-law partner amounts range from $14,156 to $15,705 for taxpayers with taxable income below $173,205 The benefit of the increased amounts gradually declines until it is eliminated when taxable income reaches $246,752.