Optimizing RRSP, TFSA & FHSA Contributions
Maximize Your Tax Savings & Build Wealth with Smart Contribution Strategies
Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), and First Home Savings Accounts (FHSAs) are powerful financial tools that help Canadians save for retirement, major purchases, and homeownership while providing significant tax benefits. Knowing when and how much to contribute can reduce your taxable income, grow your investments tax-free, and maximize government incentives.
At Westview Accounting & Tax Services Inc., we help individuals in North Vancouver, BC, develop personalized, tax-efficient savings strategies using RRSPs, TFSAs, and FHSAs to minimize taxes and maximize long-term wealth.
Understanding the Key Differences
Between RRSP, TFSA & FHSA
Savings Plan
Tax Benefits
Best Use Case
Contribution Limit
Withdrawals
RRSP
Contributions are tax-deductible, reducing taxable income
Retirement savings & long-term investments
18% of previous year’s income (max $31,560 for 2024)
Taxed upon withdrawal, but income may be lower in retirement
TFSA
Investment growth is tax-free, but contributions are not deductible
Short- & long-term savings, investments
$7,000 per year (2024 limit)
Withdrawals are completely tax-free
FHSA
Tax-free for home purchase; otherwise taxed like an RRSP
Saving for a first home down payment
$8,000 per year (lifetime max $40,000)
Tax-free for home purchase, otherwise taxed like an RRSP
Tip: Choosing the right combination of these accounts depends on your income level, financial goals, and tax situation.
Tip: Choosing the right combination of these accounts depends on your income level, financial goals, and tax situation.
Optimizing Your RRSP Contributions
(T1 Schedule 7, RC71)
Reduce Taxable Income with RRSP Contributions
Contributions reduce taxable income, which can lead to large tax refunds.
Best for high-income earners looking to lower taxes.
Use RRSP Contribution Room Effectively
You can contribute up to 18% of last year’s income (up to $31,560 for 2024).
Unused RRSP room carries forward indefinitely.
RRSP Spousal Contributions (Income Splitting Strategy)
High-income earners can contribute to a spousal RRSP to shift future taxable income to a lower-earning spouse.
Withdraw Tax-Free for First Home or Education
Home Buyers’ Plan (HBP – T1036): Withdraw up to $35,000 tax-free for a home purchase (must be repaid over 15 years).
Lifelong Learning Plan (LLP): Withdraw $10,000 per year (max $20,000) for education without immediate taxation.
Delay Claiming RRSP Contributions for Future Tax Savings
If you expect a higher income next year, you can carry forward RRSP contributions to claim deductions in a future tax year.
Maximizing TFSA Contributions (T1 Schedule 3)
Tax-Free Investment Growth & Withdrawals
All income earned inside a TFSA is tax-free, including interest, dividends, and capital gains.
Unlike RRSPs, withdrawals don’t count as taxable income and can be re-contributed the next year.
Best for Long-Term Investing & Emergency Funds
Ideal for saving for major purchases, retirement, or emergency funds without tax consequences.
Contribution Room Accumulates Over Time
Unused TFSA room carries forward indefinitely.
The 2024 annual limit is $7,000, but if you’ve never contributed, you may have up to $95,000 in available room (since 2009).
Avoid Over-Contributions (CRA Penalties Apply)
Over-contributions are subject to a 1% monthly penalty until corrected.
Using the FHSA for First-Time Home Buyers (RC725)
Combine RRSP & FHSA for Home Savings
FHSA contributions are tax-deductible like an RRSP, but withdrawals for a first home are tax-free, like a TFSA.
You can combine FHSA savings with the RRSP Home Buyers’ Plan (HBP) to withdraw up to $35,000 tax-free.
Maximize Lifetime FHSA Contributions
Annual limit: $8,000 (lifetime max: $40,000).
Contributions reduce taxable income, providing immediate tax benefits.
Unused FHSA Funds Can Be Transferred to an RRSP
If you don’t buy a home, you can transfer FHSA savings to your RRSP without affecting contribution room.
Eligibility Requirements for the FHSA
Must be a first-time home buyer (haven’t owned a home in the past four years).
Must use the funds for a qualifying home purchase within 15 years.
Strategic Tax Planning:
Which Account Should You Use First?
High-Income Earners (Over $80,000 per Year)
Prioritize RRSP contributions to reduce taxable income.
Medium-Income Earners ($40,000 – $80,000 per Year)
Use a mix of TFSA & RRSP to balance tax benefits and flexibility.
Low-Income Earners (Under $40,000 per Year)
Prioritize TFSA savings (RRSP contributions may not provide immediate tax benefits).
First-Time Home Buyers
Maximize FHSA contributions before using RRSP HBP withdrawals.
Retirees & Seniors
Focus on TFSA to avoid OAS clawback (RRSP withdrawals count as taxable income).
Tip: Proper tax planning can increase savings and reduce taxes both now and in the future.
Strategic Tax Planning:
Which Account Should You Use First?
High-Income Earners (Over $80,000 per Year)
Prioritize RRSP contributions to reduce taxable income.
Medium-Income Earners ($40,000 – $80,000 per Year)
Use a mix of TFSA & RRSP to balance tax benefits and flexibility.
Low-Income Earners (Under $40,000 per Year)
Prioritize TFSA savings (RRSP contributions may not provide immediate tax benefits).
First-Time Home Buyers
Maximize FHSA contributions before using RRSP HBP withdrawals.
Retirees & Seniors
Focus on TFSA to avoid OAS clawback (RRSP withdrawals count as taxable income).
Tip: Proper tax planning can increase savings and reduce taxes both now and in the future.
How Westview Helps You Optimize Your
RRSP, TFSA & FHSA Contributions
Maximizing Tax Deductions on
RRSP Contributions
We calculate the best contribution amount to
lower your tax bill.
Strategic TFSA Investment Planning
We help you allocate funds for long-term,
tax-free growth.
FHSA Optimization for
First-Time Buyers
We ensure you maximize tax-free home savings while reducing taxable income.
Avoiding Over-Contribution Penalties
We track RRSP, TFSA, and FHSA contribution limits to prevent
costly CRA penalties.
We track RRSP, TFSA, and FHSA contribution limits to prevent costly CRA penalties.
RRSP-to-RRIF & Pension Tax Planning for Retirees
We create retirement withdrawal strategies to minimize tax burdens.
Why Work with Westview Accounting & Tax Services Inc.?
At Westview Accounting & Tax Services Inc., we combine deep expertise with personalized service. Our team takes the time to understand your unique financial situation and offers tailored advice to ensure your return is accurate, compliant, and optimized for maximum refunds. We don’t just file your taxes—we help you plan smarter for the future. Whether you’re a newcomer, business owner, or retiree, you can trust us for clear guidance, strategic savings, and peace of mind all year long.
Experienced accountants
Transparent, upfront pricing
Professional review of all tax documents
Personalized advice for your financial goals
Convenient online or in-person filing options
Save Smarter & Pay Less Tax with Strategic RRSP, TFSA & FHSA Contributions!
Investing in your retirement, future home, or long-term wealth requires smart tax planning. Let Westview Accounting & Tax Services Inc. optimize your RRSP, TFSA, & FHSA contributions, ensuring maximum tax savings and investment growth in North Vancouver, BC.
Contact Us Today! Get expert, tax-efficient savings strategies tailored to your financial goals!
Westview Accounting provides trusted accounting, tax, and bookkeeping services across North Vancouver and Surrey. We help individuals and businesses stay compliant, informed, and financially confident.