# Is there a way to defer taxable income to next tax year?



## twowheeled (Jan 15, 2011)

I am looking for creative but legal ways to defer my taxable income into 2013's tax year. 

In 2011 I grossed 100k roughly. I maxed out RRSP contributions for 2011.

2012 I grossed the same amount. Though company matched contributions I have already used up about $3500 of my room, so approx 15,000 left. 

2013 I am going to finish my contract and take time off. I will have about 10k income plus capital gains which I conservatively estimate another $10k. So my total income for 2013 is going to be less than $20k. 


I'm not sure if this is possible for me to defer any income from 2012 into 2013 to avoid taxes. My only idea is to overcontribute this year by whatever is allowable (2000?) and immediately withdraw in 2013 to avoid the penalty, but the savings is minor. Any ideas?


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## OptsyEagle (Nov 29, 2009)

Over-contributions are not tax deductible. Their allowance is simply a matter of them not generating any extra penalty, and it is only $2,000. In my opinion, there is nothing you can do.


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## domelight (Oct 12, 2012)

twowheeled said:


> I am looking for creative but legal ways to defer my taxable income into 2013's tax year.
> 
> In 2011 I grossed 100k roughly. I maxed out RRSP contributions for 2011.
> 
> ...


 About your only choice would be "Flow Through Shares" however this defers income for two years not one. You would need to talk to a financial advisor to purchase them. However I highly doubt you could execute this before year end. And be warned they are a risky you could lose your entire investment. However that being said they are a straight deduction on purchase (same impact as an rrsp purchase) and then treated as a capital gain (50% taxable) when cashed in two years later. Generally you can afford to take a loss on the investment and still break even as a result of the tak implications. the percentage of loss would depend on your individual tax position. I may be mistaken but my understanding is that a limited number of these types of shares are available per annum and usually the good ones are skooped up early, meaning whats left at the end of the year are not as attractive from a investment perspective.
In conclusion you should consider cashing our some RRSP's in 2013 to maximize the ta opportunity, and as always my advice a few hundred bucks to a good accountant for a consulting session could potentially save you much more.


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