Tax Tidbits and Traps
Real Estate: Change in Use? A May 29, 2026 Tax Court of Canada case reviewed whether two real estate properties were held on account of income or capital, and if there was a change in how they were held prior…
RRSP Tax Advantages
A Registered Retirement Savings Plan (RRSP) is a government-registered investment account that helps Canadians save for retirement. As a Canadian, you can contribute to an RRSP for yourself, your spouse or common-law partner, allowing your investments to grow tax-deferred until withdrawal.
RRSP contributions are tax-deductible, reducing your annual taxable income and helping you save on your current tax bill while saving for your future. Investment income earned within the plan—such as interest, dividends, or capital gains—is not taxed until you withdraw the funds, typically during retirement when your income (and tax rate) may be lower.
We can help you determine how to best use RRSPs to maximize savings, reduce tax obligations and plan for your future.
HOW IS YOUR RRSP DEDUCTION LIMIT CALCULATED?
The Canada Revenue Agency generally calculates your RRSP deduction limit as follows:
The lesser of
-
18% of your earned income in the previous year, and
-
the annual RRSP limit
Minus
-
your pension adjustments (PA)
-
your past service pension adjustments (PSPA)
Plus
-
your pension adjustment reversals (PAR), and
-
your unused RRSP, PRPP, or SPP contributions at the end of the previous year
The 2025 annual RRSP limit of $32,490
If you want to calculate your RRSP deduction limit yourself, see chart 3 of Guide T4040, RRSPs and Other Registered Plans for Retirement.
You can set up a registered retirement savings plan (RRSP) through a financial institution such as a bank, credit union, trust or insurance company. Your financial institution will advise you on the types of RRSP and the investments they can contain.
You may want to set up a spousal or common-law partner RRSP. This type of plan can help ensure that retirement income is evenly split between both of you. The benefit is greatest if a higher-income spouse or common-law partner contributes to an RRSP for a lower-income spouse or common-law partner.
If you prefer to manage your own investments, a self-guided RRSP gives you more control over your retirement portfolio. A self-guided RRSP allows you to buy and sell a variety of investments– including stocks, bonds, mutual funds and EFTs. This approach is perfect for the savvy investors with time, knowledge, and risk-tolerance to handle changing marketing conditions.
We can help you calculate your RRSP deduction limit, but if you’d like to check it yourself, the Government of Canada provides several easy ways to find your contribution room (also known as your RRSP or PRPP deduction limit). You can find this information on:
-
the “Available contribution room for 2025” amount found on the RRSP Deduction Limit Statement, on your latest notice of assessment or notice of reassessment
-
Form T1028 – Your RRSP Information for 2024: The Canada Revenue Agency (CRA) may send you this form if there have been any changes to your RRSP deduction limit since your last tax assessment.
RESP – Registered Education Savings Program
Saving for your child’s future.
A Registered Education Savings Plan (RESP) is a government-registered savings plan that helps parents and families in Canada save for a child’s post-secondary education. Funds in RESPs can be used for tuition and related expenses at Canadian universities, colleges or other designated educational institutions, and approved universities and colleges outside of Canada. RESPs can also be used for certified training programs approved by the Employment and Social Development Canada (ESDC).
Who Can Contribute To An RESP?
Anyone—parents, grandparents, other family members and friends—can open an RESP for a child. RESPs can be opened by one person, or jointly by spouses or common-law partners. RESPs can also be opened by child-care agencies. While you can open a plan for a child, you can also name yourself or another adult as the beneficiary.
There are three main types of RESPs – Family Plan, Individual (non-family) Plan, and Group Plan. It is very important to choose the right RESP.
We can help guide you, so you can confidently choose the right RESP type for your family
To open an RESP follow these two easy steps:
-
Get a Social Insurance Number (SIN) for your child, and get one for yourself if you do not already have one. There is no fee; however, certain documents, such as birth certificates, are required.
-
Choose an RESP provider that best suits your needs. Most financial institutions (such as banks and credit unions), as well as certified financial planners and group plan dealers provide RESPs.
• There are three main types of RESPs – Family Plan, Individual (non-family) Plan, and Group Plan.
FAMILY PLAN RESP is for children who are related to you either by blood or by legal adoption. They may be your child, grandchild, stepchild, brother or sister. A family plan is ideal for families with one or more children. You can name one or more children to receive the savings when it is time to pay for their studies after high school.
FAMILY PLAN RESP is for children who are related to you either by blood or by legal adoption. They may be your child, grandchild, stepchild, brother or sister. A family plan is ideal for families with one or more children. You can name one or more children to receive the savings when it is time to pay for their studies after high school.
INDIVIDUAL (non family) PLAN RESP is ideal if you are not related to the child you are saving for. In this type of plan, only one beneficiary is named in the RESP, and the beneficiary does not have to be related to you.
A GROUP PLAN RESP is for one child only, and the child does not have to be related to you. In this type of plan, your savings are combined with those of other people with children of the same age. How much each child gets depends on how much money is in the group account, and on the number of students of the same age who are in school that year. These plans are usually provided by scholarship-plan dealers rather than typical banks, and will usually invest the money in low-risk investments.
TFSA – Tax Free Savings Account
Grow Tax-Free Savings
The Tax-Free Savings Account (TFSA) program is popular with Canadians aged 18 or older, as a way to save money throughout their lifetime. While contributions to a TFSA are not deductible for income tax purposes, any amount contributed as well as any income earned including interest, dividends or capital gains is generally tax-free, even when it is withdrawn. To maximize your retirement savings, we recommend regular contribution and usage of the TFSA in conjunction with a diversified retirement portfolio strategy. Our team can help you determine the most effective way to incorporate the TFSA into your retirement plan.
Annual TFSA Contribution Limits
Your “TFSA contribution room” is the maximum amount that you can contribute to your TFSA.
Since 2009, the TFSA contribution room has accumulated every year, for anyone who is 18 years of age or older and a resident of Canada at any point during the calendar year.
For Canadian investors and savers, the annual increase in the contribution limit for Tax-Free Savings Accounts (TFSA) is some of the best news to come each year. The current limit means someone who has never contributed to a TFSA and was old enough to have one since its inception will have a cumulative contribution room of $102,000 as of Jan 1, 2025.
Be aware of the rules and restrictions for tax-free savings account (TFSA) contributions, withdrawals and transfers.
-
Only contributions made under a valid social insurance number are accepted as TFSA contributions.
-
You can contribute up to your TFSA contribution room. A tax applies to all contributions exceeding your TFSA contribution room.
-
Withdrawals will be added to your TFSA contribution room at the beginning of the following year.
-
You can replace the amount of the withdrawal in the same year only if you have available TFSA contribution room
-
Direct transfers must be completed by your financial institution
Depending on the type of investment held in your TFSA, you can generally withdraw any amount from the TFSA at any time. Withdrawing funds from your TFSA does not reduce the total amount of contributions you have already made for the year. Withdrawals made from your TFSA, excluding qualifying transfers and specified distributions, will only be added back to your TFSA contribution room at the beginning of the following year.
If you choose to re-contribute all or part of a TFSA withdrawal within the same calendar year, check that you have available contribution room. Re-contributing to a TFSA without sufficient contribution room, will result in over-contribution to your TFSA. TFSA over-contribution is subject to a tax equal to 1% of the highest excess TFSA amount in the month, for each month that the excess amount remains in your account. For more information on withdrawing amounts from your TFSA, contact your TFSA issuer.
Transfers between your own TFSAs, and those completed upon the breakdown of a marriage or common-law partnership are considered qualifying transfers. All qualifying transfers must be completed by a financial institution.
ESTATE PLANNING AND WILLS
Part of retirement planning involves estate planning– making or updating your will, and naming your estate representative. Our team is here to help guide you through these important decisions– offering transparency and openness in our discussions with you.
More information about Estate Planning and Wills courtesy of the Government of Canada >
Tax Tidbits – Trucking Sector: New Reporting Obligations
Some quick points to consider… CRA will receive information from online digital platforms that facilitate the sale of goods and provisions of services, such as Airbnb, VRBO, Uber, etc., in respect of the 2025 calendar year, by January 31, 2026….
Tax Tidbits – Voluntary Disclosures: Changes to the Program
The voluntary disclosures program (VDP) provides taxpayers with a chance to correct past tax errors or omissions before CRA finds them. If CRA accepts a disclosure, taxpayers may receive some penalty and interest relief and will not be referred for…