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Before closing her books, Tracie Heier, CPA, decides if she should max out her or her basing the decision on her听projected income for the year.

Heier, an associate partner at SRJ Chartered Accountants in Toronto, says that for someone in their peak earning years, it might make more sense to contribute to their RRSP over TFSA.听

鈥淭his year, I am choosing to contribute to both the TFSA and RRSP because of advice from my听financial planner,鈥� says Heier, 鈥渂ut it boils down to your income and long-term goals听to determine what makes the most sense.鈥�

Jason Heath, managing director at Objective Financial Partners in Toronto, agrees.听

鈥淕enerally speaking, you鈥檙e probably going to be in a lower tax bracket in retirement when withdrawing from the RRSP, which makes contributing to your RRSP during your working years more beneficial.鈥�

Both investment vehicles tend to be underused.

The most recent data from the CRA shows that in 2020, just 8.9 per cent of TFSA holders maxed out their account鈥檚 cumulative contribution room.

An Edward Jones poll found that of those contributing to their RRSP,听听planned to max out their accounts in 2023.

For married or common-law partners, Heath recommends contributing in the higher-earning partner鈥檚 name so that the couple can benefit from the larger tax refunds.听

Heier also recommends听eligible Canadians open a 听(FHSA), a tax-free account to help you sock away a down payment for a first home.

She points out that, similar to an RRSP or TFSA, you don’t have to contribute the full amount to a FHSA.

鈥淎 lot of the time,”听says Heier, “what we recommend is to contribute what you can, and then the (contribution) room will continue to build.鈥澨�

And remember to hold on to your receipts and keep running totals of your expenses听for tax time in the spring.

鈥淧ersonally, I like to use an Excel spreadsheet to map out my medical expenses or any of my charitable donations,鈥� says Heier.

Come tax-filing time, all she has to do is log in to the CRA website and punch in the numbers.

Heath also recommends clients track expenses electronically. He adds that听some overlooked medical expenses听are听premiums on your company鈥檚 health insurance plan or a non-refundable disability tax credit for conditions like Type 1 diabetes.听

While tax planning is important for all Canadians, Heath points out that retirees tend to be overlooked when it comes to tax strategy.

鈥淎s financial planners, we do a lot of planning with retirees to determine if someone should be withdrawing from their RRSP before age 71,鈥� says Heath.听“In a lot of cases, for someone retiring in their 50s or 60s, it is actually advantageous to take optional RRSP withdrawals earlier to try to smooth out your income and pay less in tax.鈥�