Tax changes and deadlines for the 2011 tax year (January 2011)

A number of tax changes will take effect on January 1, 2011, most of them affecting individual taxpayers. The more significant changes are listed below.

• RRSP deduction limit increases to $22,450

 The RRSP contribution limit for the 2011 tax year (for which the contribution deadline is February 29, 2012) will increase to $22,450. In order to make the maximum contribution for 2011, it will be necessary to have had earned income for the 2010 taxation year of $124,722.

• Tax-free savings account contribution limit

There is no change to the TFSA contribution limit for 2011, as the annual limit remains at $5,000. Current-year TFSA contributions can be made at any time during the calendar year. Where a contribution is not made during the calendar year, the contribution room is carried over and the contribution may be made in any subsequent taxation year.

• Individual tax instalment deadlines for 2011

Millions of individual taxpayers pay income tax by quarterly instalments, which are usually due on the 15^th day of each of March, June, September and December. As each of those dates in 2011 falls on a regular business day, the 15^th of each of those months will be the actually payment deadline.

• Reduction in federal corporate tax rates

The general corporate tax rate is reduced, effective January 1, 2011, from 18.0% to 16.5%. There is no change in any other federal corporate tax rate for 2011.