Registered Retirement Savings Plans (RRSPs) are one of the only legal tax shelters available for Canadians. And every year, thousands of taxpayers make contributions to help save for retirement and take advantage of the tax savings. Since RRSP contributions are deducted from your taxable income, they can reduce your tax liability.
But there are some cases in which you do not want to use your RRSP contribution on your current tax return. It may be that you did not have enough taxable income to maximize the savings or perhaps you received a bonus in early 2013 and want to apply the contribution to next year’s return, when you will be facing a bigger tax bill.
Any RRSP contributions made in the first 60 days of 2013 are required to be reported on your 2012 tax return. But you do not have to use the contribution in calculating your return. You can save it for use in a future year when you can fully use the deduction. The amount will be noted on your Notice of Assessment.
This does not mean you can over-contribute to your RRSP and just not claim the deduction. You are allowed to over-contribute up to $2,000 over your RRSP limit without penalty, but you cannot claim a deduction for the excess amount.
If you find an old RRSP slip or have not been reporting your RRSP deductions in the right year, you will need to complete a T1 Adjustment Form to make the correction.
Remember, you have until March 1 to make RRSP contributions that can be used on your 2012 tax return.