2014 Tax Season Tips - TFSA Limits, RRSP Limits, Prescribed Interest Rates

Here are some reminders to keep you on track for tax filing this year:

2014 TFSA limit is $5,500
The Tax Free Savings Account (TFSA) contribution limit is $5,500 for 2014.  It was increased in 2013 from $5,000 in previous years starting back in 2009. You have to be 18 or over and unused contribution room can be carried forward.  TIP: you can contribute funds given to you by your spouse or common-law partner with no attribution of income back to the spouse/ partner. Tax free savings are a terrible thing to waste!

Any withdrawal restores the contribution limit for that amount - you can cannot re-contribute this until the following calendar year!  TIP: make any withdrawal close to the end of the year so you can have restore the contribution room sooner.

2014 RRSP and Pension Limits
The RRSP contribution limits increase to $24,270 in 2014 an
d to $24,930 in 2015. It was $23,820 in 2013.

Prescribed Interest Rates 2013 and For First Quarter 2014
The prescribed interest rates for the first calendar quarter of 2014 will drop 1%:

  • The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums will be 5%. TIP: don't file late!
  • The interest rate paid on overpayments will be 3%. TIP: don't overpay! Wait, comparing this to short term savings rates, maybe it is OK to overpay to earn 3%? This is only for corporate taxes.
  • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 1%.
The prescribed rates for the fourth quarter of 2013 are as follows:
  • The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums will be 6%.
  • The interest rate paid on overpayments will be 4%.
  • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 2%.
  • The first, second and third calendar quarters of 2013 were as follows:
  • The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums was 5%.
  • The interest rate paid on overpayments was 3%.
  • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans was 1%