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After filing last year's tax return, the Notice of Assessment that you received from Canada Revenue Agency (CRA) stated your maximum contribution for the current year. This info is also accessible by calling CRA in English: 1-800-959-8281; or in French: 1-800-959-7383. For Canadians who are self-employed, or employed and not a member of an employer-funded Registered Pension Plan (RPP) or Deferred Profit-Sharing Plan (DPSP): for the 2007 tax year, your current year's RSP contribution limit is 18% of your previous year's "Earned Income" to a maximum of $19,000, plus any unused contribution room carried forward from previous years. For those who are a member of an employer-funded RPP or DPSP: for the 2007 tax year, your current year's RRSP contribution limit is 18% of your previous year's earned income to a maximum of $19,000 minus the Pension Adjustment reported by your employer (found in box 52 of your previous year's T4 slip), plus any Pension Adjustment Reversal reported by your employer on Form T10, plus any unused contribution room carried forward from previous years (Canadians have approximately .5 trillion dollars in unused RRSP contribution room). Maximum allowed contribution Tax year Contribution 2007 $19,000 2008 $20,000 2009 $21,000 2010 $22,000 Source: CRA Carrying forward unused contribution room  If your allowed contribution is not made this year, you can carry forward any unused portion to a future year without affecting your annual ontribution limit. For example, if you are eligible to make a $19,000 contribution this year but are able to contribute only $12,000, you can carry forward the $7,000 amount to a future year without affecting your regular contribution limit. Overcontribution In a year when you have extra cash to invest, you can overcontribute up to, but not in excess of, the lifetime maximum buffer allowance of $2,000 (designed to help taxpayers who might erroneously overcontribute). You can claim the tax deduction in a later year. What is the benefit of doing this? You will get the benefit of ongoing tax deferral on the investment income within the RRSP from the time the deposit is made. A percentage tax penalty applies per month for contributions that exceed the combined total of your maximum RRSP contribution limit plus the lifetime overcontribution limit. Overcontributing $2,000 Though you can't make RRSP contributions to your own RRSP after your RRSP maturity option deadline, consider making an RRSP overcontribution before your RRSP maturity deadline. You could then claim a $2,000 deduction against earned income in later years. Note: Overcontributions in excess of $2,000 are subject to a penalty of 1% per month by Canada Revenue Agency (CRA). Overcontributing beyond the $2,000 limit CRA's penalty is applied at the end of each month. Thus, an overcontribution made on December 1 of the year you turn 71 would incur only one month's penalty. The penalty should be eliminated by January 1 of the year within which you turn 72, when new RRSP contribution room is applied to the system, cancelling out the overcontribution. Talk to your advisor about this strategy to see if it applies to your circumstance.

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