If I purchase $50,000 of RRSPs this year, I believe that I can defer some of this purchase over the next several years. I could, for example, claim $16,667 on each of my next three tax returns.
Assume for this question that my income is $58,211. The Federal Personal Income Tax Brackets and Rates for 2011 indicate that I pay approximately 22% federal tax for my income above $41,544, and 15% for my income below that figure.
Purely from the point of view of minimising my federal tax, then, it would seem that it would make the most sense to defer my reporting of my RRSP purchasing over several years. I would be able to reduce my marginal tax rate from 22% to 15% in each of three years.
Can Canadians actually defer reporting of RRSP purchases over several tax returns? If my goal is to reduce the taxes paid, is this the best plan?