Maximizing Tax Efficiency in 2024: A Comprehensive Guide

Written by The Murray Wealth Group

As we begin 2024, it’s prime time to strategize and ensure you’re making the most of available tax-saving opportunities.

Here’s a breakdown of key accounts for Canadian residents to consider for the upcoming tax year:

Tax-Free Savings Account (TFSA) 
💡 Did You Know? The TFSA contribution limit for 2024 is $7000!
TFSA remains an invaluable tool for all Canadian residents, offering unparalleled flexibility for both short and long-term investors. It’s crucial to utilize your contribution room effectively. The 2024 TFSA contribution limit is $7,000, and if you haven’t contributed before, you could have up to $95,000 in unused contribution room if you turned 18 in 2009.

Registered Retirement Savings Plan (RRSP) / Spousal RRSP 
RRSPs provide a means to defer tax payments, especially beneficial during peak earning years. Contributing during high-income years and withdrawing in retirement, when you may be in a lower tax bracket, can significantly boost savings. Spousal RRSPs, with retirement income splitting features, offer additional flexibility.  The contribution deadline for 2023 taxes is February 29, 2024.  Note that December 31st, in the year you turn 71, is the last chance to contribute to an RRSP.

Registered Education Savings Plan (RESP) 
For new parents or grandparents, a RESP is a valuable tool for saving for education costs. Like an RRSP, gains are tax-deferred until the child is in full-time post-secondary education. An annual $2,500 deposit triggers a $500 grant from the Government of Canada, resulting in a 20% return. Contact the MWG team for more information. There is no contribution deadline, and the lifetime limit per child is $50,000, with a $2,500/year maximum for the grant.

As you gear up for the 2024 tax year, leveraging these tips can pave the way for a more tax-efficient and financially rewarding future.

As always, we welcome any feedback or questions you may have on these monthly commentaries.