Year-end RRSP and TFSA checklist for 2024

December means two deadlines that matter for your registered accounts - one you can't miss, one you shouldn't.

Your TFSA contribution room resets January 1st. Miss it and you've lost that room forever. Your RRSP has until March 2nd, 2025, but waiting costs you two months of tax-sheltered growth.

TFSA: Use it or lose it

You get $7,000 in new TFSA room on January 1st, 2025. But 2024's room expires in two weeks. If you had space this year and didn't use it, that room disappears December 31st.

Check your CRA My Account for your exact 2024 TFSA room. The number includes your unused room from previous years plus this year's $7,000. Whatever you don't contribute by December 31st is gone.

The catch: if you withdrew money from your TFSA this year, you get that room back January 1st - not immediately. Withdraw $5,000 in November, you can't put it back until January. Try to put it back in December and you'll face a 1% per month penalty on the excess.

Maximize 2024 room now if you have the cash. Even if it's just parking money in a high-interest savings account inside the TFSA, that beats losing the room entirely.

RRSP: Two months matter

Your RRSP deadline is March 2nd, 2025, for contributions that count against 2024 income. But contributing in December versus February costs you growth time inside the account.

The bigger consideration is your tax refund timing. Contribute by December 31st and your 2024 T4 will show the deduction when your employer issues it. That usually means an earlier refund when you file in February or March.

Wait until February to contribute and you won't see that refund until after you file - potentially April or May.

For someone earning $80,000 in Ontario, maximizing the 2024 RRSP contribution limit means roughly $5,800 back from CRA. Getting that refund two months earlier is worth something, especially if you're planning to invest it.

Income splitting opportunities

If you're married or common-law, December is your last chance for spousal RRSP contributions that count for 2024. You contribute to your spouse's RRSP, you get the tax deduction, they own the money.

This works when one partner earns significantly more than the other. The higher earner gets the immediate tax break at their marginal rate. The lower earner pays tax on withdrawals later, probably at a lower rate.

The three-year rule applies: if your spouse withdraws money within three years of your contribution, you pay the tax on the withdrawal, not them. Plan accordingly.

What about 2025 planning?

Your 2025 room starts fresh January 1st. TFSA room increases to $7,000 again. Your RRSP room depends on your 2024 earned income - 18% of that, up to $32,490.

But don't wait for your Notice of Assessment to plan. If you earned around $180,000 or more in 2024, you'll hit the maximum. Anything less and you can estimate: take your 2024 gross income, multiply by 0.18, and that's roughly your 2025 RRSP room.

TaxSplit.ca will show you exactly what your contribution is worth in tax savings based on your income and province.

The December 31st priority

TFSA room first if you're choosing between accounts. You can't get 2024 room back after December 31st. RRSP room rolls forward until March 2nd and keeps accumulating if you don't use it.

If you've got both accounts maxed, you're probably not reading year-end checklists. If you don't, TFSA room expires in two weeks.