Wednesday, February 6, 2008

This month has 29 days

In addition to being an Olympic year, 2008 is a Leap Year. That means your savings accounts will earn an extra day's interest, but your debts will also accrue an extra day's interest. Most significantly, this year February has 29 days.

For those of you here in the Great White North, a Leap Year has a specific impact on tax planning. The deadline for RRSP contributions in a Leap Year is February 29, not March 1. This means that, if you make a contribution after February 29, it will be counted toward your 2008 (or later) taxes.

February 29 is a Friday, and will therefore be a very busy time in most bank branches you might choose to visit. Therefore, it's probably a good idea to set things in motion for any last-minute RRSP contributions before the 29th, so that you don't find yourself late to the party.

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