Key 2023 Financial Planning Facts and Figures

RRSPs

• The RRSP deadline for the 2022 tax year is March 1^st, 2023.
• RRSP Contribution Limit:
  • 18% of the previous year’s income to a maximum of:
    • For 2022: $29,210
    • For 2023: $30,708
    • Plus, any unused RRSP contribution room carried forward from prior years.
• Your contribution room can be found on your CRA Notice of Assessment.
• You can contribute up to December 31, the year you turn 71, and to a Spousal RRSP until December 31, the year your spouse/CLP turns 71.

Spousal RRSP Rules

• Any amounts that may be contributed to an individual’s plan under their personal RRSP limit may be contributed to a spousal RRSP.
• If you contribute to a Spousal RRSP, you receive the tax deduction, and your spouse/CLP owns the RRSP.
• Any amounts withdrawn from a spousal RRSP within three years of the last contribution are taxed in the hands of the contributor.

TFSAs

• The contribution room for 2023 is $6,500.
• The cumulative contribution room since 2009 is $88,000.
  • You would have had to be 18 in 2009 to qualify for the $88,000 maximum limit.
• You must be 18 years old to open a TFSA.

Old Age Security (OAS)

• You must be 65 years old to collect.
• For ages 65 to 74: the current maximum monthly amount is $687.56 per month ($520.72/year).
• For ages 75 and over: The current maximum monthly month amount is $756.32 per month ($9,075.84/year).
  • (Current rates from January to March 2023)
• Fully-taxable income.

OAS Claw Back (recovery tax)

• The clawback occurs when your net income is over $86,912.
• OAS clawback is equal to 15% of the amount over $86,912 (including OAS). 
• If you are under 65-74, the full repayment of OAS occurs when your net income is above $141,917.
• If you are over 75, the full repayment of OAS is when your net income is above $147,418.
  • Applicable to payments made from July 2024 to June 2025.

2023 Canada Pension Plan (CPP) Payments

• The CPP maximum monthly benefit (assuming payments begin at age 65) is $1,306.57 or $15,678.84 annually. 
• If you start CPP prior to age 65, the reduction per month is 0.60% per month or 7.2% per year.
  • You must be at least age 60 to collect CPP.
• If you delay until age 70, the bonus payment is 0.70% per month or 8.4% per year. 

Registered Education (RESP) Limits

• Lifetime contribution per beneficiary: $50,000
• Maximum CESG limit per beneficiary: $7,200
• Basic CESG Rate on the first $2,500 of annual contributions: 20%

Probate Fees in Ontario 

• 1.5% of the portion over $50,000

Ontario Withholding Tax for RRSP and RRIF withdrawals: 

• Up to $5,000: 10% tax 
• From $5,001 to $15,000: 20% tax
• Over $15,000: 30% tax
• For RRIFs, the tax is on the amounts over the annual minimum payments.

2023 Canadian Controlled Private Corporation (CCPC) Tax Rates for Ontario

• Active business Income to $500,000: 12.2% tax.
• Active Business income greater than $500,000: 26.5% tax.
• Investment Income: 50.17% tax.
• Combined federal and provincial rates.

Important Dates:

• Individual Tax Filing Deadline: May 1^st, 2030
• Self-Employed Business Tax Filing Deadline: June 15, 2023
• Quarterly Deadline for Personal Tax Installments
  • March 15, 2023
  • June 15, 2023
  • September 15, 2023
  • December 15, 2023
• If you turn 71 in 2023, you must convert your RRSP to a Registered Retirement Income Fund (RRIF) by December 31, 2023.
• The Registered Education Contribution deadline is December 31, 2023.

Source of Information:

• BMO Private Wealth 2023 Wealth Planning Facts and Figures
• Mackenzie Investments 2023 Tax Planning
• CI Global Asset Management RRSP vs TFSA Quick Facts

 

Download our White Paper: Your Retirement Road Map: How to make the Transition to Retirement HERE  

For more information, you can refer to Preserving Wealth: The Next Generation – The definitive guide to protecting, investing, and transferring wealth by Jack Lumsden, MBA, CFP®.

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