Registered Retirement Savings PlanLoeppky also suggested people may also want to defer claiming this year's RRSP contribution until the 2016 tax year to maximize the benefit. She estimated that those in the top bracket could save $800 by deferring the deduction on a $20,000 contribution.
Michelle Munroe, director of tax planning at Fidelity Investments, also said that as long as it won't push you into a higher bracket, you may want to defer any bonus you might be in line to receive until next year. "It depends on how big the bonus is," she said. "You don't want to push yourself into a higher tax category." In addition to the tax rate changes, Ottawa is ending the controversial income-splitting plan for families next year. The government is also rolling back the annual tax-free savings account contribution limit to $5,500 from $10,000 this year. Loeppky said the TFSA remains an effective tool for investing tax-free, but the amount you will be able to shelter will be less. The NDP had called on the government to reduce the rate on the lowest income bracket instead of the middle income bracket because that would help the lowest income Canadians. However, Finance Minister Bill Morneau said the move Monday was only the first step of the government's plan and promised more in the budget. During the election campaign, the Liberals promised a new child benefit program that would benefit for low-income Canadians that would be gradually reduced as a family's income rises. The program would replace the universal child care benefit that paid a $160 per child per month, regardless of family income.
"You don't want to push yourself into a higher tax category."
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