As every red-blooded Canadian investor surely must know by now, today is the last day to make an RRSP contribution for the 2014 tax year.
As I wrote for Motley Fool Canada/MSN Money in two pieces in February (one on RRSPs, the other on the looming tax-filing deadline), today (or better yet the weekend just passed) would be a good time to at least do a preliminary dry run on your taxes.
Why? If you’re a salaried employee, you should by now have received your T-4 slip, which means if you enter the slip into your tax program, you’ll have a pretty good idea of how much tax you’ve already paid and how much you may yet need to pay.
T-4s are here; time to stop procrastinating
Sure, the filing deadline isn’t until Thursday, April 30th, roughly two months from now. But if you wait even until tomorrow, it will be too late to check out your past RRSP contributions and carry forward status in time to make up any contribution shortfall that may have fallen through the cracks the past year. Check with your accountant or financial advisor if you’re unsure of the situation but remember two things:
One, while it’s not recommended as a deliberate strategy, you do have some over-contribution leeway of $2,000. And second, as far as I know if you contribute today and don’t actually need the full amount to reduce your 2014 tax liability to a minimum, you can always carry it forward to the 2015 tax year now in progress and use the deduction a year from now.
And there’s also the benefit of ending the all-too-natural inclination to procrastinate on the annual tax-filing ordeal. You don’t have to file today — in fact, I wouldn’t recommend it because many T-3s and T-4s will keep dribbling in until late March/early April. But a dry run will make you feel you’ve at least started and if you DO realize you’ve under contributed to your RRSP, there’s still time to do something about it.
To be safe, I’d assume normal banking hours although a quick web search should confirm if certain branches in your area will remain open past normal banking hours. Those who do online banking may have a little more time this evening but again, waiting until the very last minute could backfire if something unexpected occurs — like your Internet access going down.
Generally, procrastination does not help you in the quest for Financial Independence!