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The RRSP deadline for this year is on February 29, 2008. Unfortunately, I won’t make the deadline because I get paid the same day and it takes atleast 3 days for a fund transfer to go through. It is a shame because I would’ve liked to get a bigger tax refund this year.

I think the best way to avoid this for next year’s income tax season is to use the T1213 – Request to Reduce Tax Deductions at Source form. Squawkfox and numerous financial bloggers have written about it and I think it does make sense. The government is taking off taxes from each paycheck and returns it through a income tax refund. What the T1213 form does is it allows you to keep more of your paycheck. All you have do is fill out the form and prove to the CRA that you are making automatic deposits to your RRSP account. Once it’s approved you give it to your payroll department. You’ll able to compound interest faster (specifically every other week) instead of waiting for your tax refund in the Spring. Filling out the form will make your tax refund smaller, but it’s with good reason.

You can go to Canada Revenue Agency’s website to complete the form and participate in it. My accountant said I should have done it in November last year to get started for this year, but I was late. She just told me to complete it as soon as I can and it will take effect once it’s approved.

I’m only going to look forward from here. It’s just another learning experience to be used for next time. I’ve started my Questrade RSP already so it’s just a matter of me to continue transferring funds to it for my longterm investments. I hope some people are able to contribute before the deadline.

photo credit: josef.stuefer