Remember that if you make a make an RRSP contribution in 2010, you do not have to deduct that contribution on your 2010 tax return.  You can save that contribution and apply in future years, when it may get you a higher tax savings.  Meanwhile, you’re money is still invested and is still benefiting from tax-sheltered growth. 

Here’s an example:

You’re taxable income is $45,000 in 2010, which in BC puts you in a 30% tax bracket.  The 30% tax bracket starts at just under $41,000, and below that mark you’re in a 23% tax bracket or lower.

Now let’s say you make an $8,000 RRSP contribution in 2010.  You could deduct the full $8,000 on your 2010 tax return, and you would get a 30% tax bracket savings on $4,000, and only a 23% tax bracket savings on the other $4,000. 

Or you could deduct $4000 on your 2010 return, and the other $4000 on your 2011 tax return, so that you get the 30% tax bracket savings on the full $8,000 (assuming the same salary in 2011). 

This does mean that you have to wait a little longer for your tax refund, but you’ll get more out of if you do. So pay attention to your tax brackets, and remember that you don’t have to claim all your contributions in the year you make them. 

For you reference, here are the 2010 BC combined federal and provincial marginal tax rates:

0 – $35,859 – 20.06%

$35,859 – $40,970 – 22.70%

$40,970 – $71,719 – 29.70%

$71,719 – $81,941 – 32.50%

$81,941 – $82,342 – 36.50%

$82,342 – $99,987 – 38.29%

$99,987 – $127,021 – 40.70%

$127,021 and up – 43.70%