It’s getting down to the end of the year. Hopefully you’ve been regularly contributing to your RRSP all year (as a self-employed person, you’re even more acutely aware that you’ll need to provide for yourself in retirement).

Ideally, you should be contributing your maximum allowable RRSP contribution limit every year to maximize your deductions from income.

Here are a few things to consider now that we’re near the end of the year.

If you have your business as a separate incorporated entity and draw your salary from it, here’s something you can do to get a bit of extra bang for the next tax return:

• If you’ve had a profitable year (always good), and room in your RRSP, bonus out some of the profits and roll it into your RRSP. This will reduce the taxable income in your corporation and top up your RRSP. If you have the room in your RRSP and roll in directly you can do it without paying source deductions on your bonus.
• If you haven’t maxed out your RRSP contributions in prior years, you can carry forward the unused portions into the current year. Your Notice of Assessment from Revenue Canada should specify your RRSP contribution limit and factor in the unused portion from previous years. If you have the money to use it, use it.
• Think about waiting until after the New Year to do this. Any contributions to your RRSP made during the first 60 days of 2007 can be counted on your 2006 tax return, but the income won’t show up until your 2007 return.
• If your RRSP is maxed and you have a spouse whose RRSP isn’t, consider topping off your spouse’s RRSP. Contributions to your spouse’s RRSP are also deductable from your taxable income.

As always, check with your accountant to find out if these strategies work for your personal situation.

Mark Jeftovic has been a self-employed internet professional since 1994, currently he is the founder and president of easyDNS Technologies Inc., the DNS hosting company and domain registrar. His personal blog is at http://mark.jeftovic.net