by Mauricio Dreher
RRSP annuitants who turn 71
Seniors turning 71 during the year only have until December 31 rather than the normal 60 days following the calendar year to make their final Registered Retirement Savings Plan (RRSP) contribution before converting the plan into a Registered Retirement Income Fund (RRIF) or purchasing an annuity.
Contribute to an RESP
Registered Education Savings Plans (RESPs) offer an opportunity for tax-deferred education savings and the prospect of supplementing savings with a number of government grants, most significantly, the Canada Education Savings Grants of $500 annually, up to a maximum of $7,200 per child.
Maximize TFSA contributions
The TFSA dollar limit for 2017 is $5,500 but there is no deadline for making a TFSA contribution. Anyone who haven’t previously contributed to a TFSA and have been at least 18 years old and resident in Canada since 2009 may contribute up to $52,000 to a TFSA in 2017.
Make a donation
When clients make a donation to a registered charity or foundation, they will be entitled to a donation tax credit for the amount given. By gifting publicly-traded securities, including mutual funds, donors not only receive a tax receipt for the fair market value of the securities being donated but any capital gains taxes are eliminated. Pooling donations with a spouse or partner such that the total is over the $200 threshold can also help to receive a higher donation credit. 2017 is also the last time to claim the additional 25% First-time Donor’s Super Credit for couples who have not made any donations after 2007.
Contribute to an RDSP
Canadians eligible for the Disability Tax Credit, their parents and other eligible contributors can contribute to a Registered Disability Savings Plan (RDSP) and apply for up to $70,000 in matching Canada Disability Savings Grants (CDSGs) and up to $20,000 of income-tested Canada Disability Savings Bonds (CDSBs).
Split that pension
Canadians may split up to half of their pension income with their spouse or common-law partner. Aside from the benefit of reducing taxes, you may also be able to preserve some or all of the age credit and avoid or minimize the Old Age Security benefits “clawback”.
Source: Renaissance Investments