A clean draft,
signed June 11
The 2025 T1 arrived from the preparer with a balance owing of $959.36 — technically flawless. But a draft return is a proposal, not a verdict. The interesting line is the one most people skim: 20800, the RRSP deduction.
Dividend credits
don't carry forward
Canadian dividends arrive with built-in tax credits. Use them in the year they land — or lose them forever. The draft return deducts so much RRSP that the credits overshoot the tax they were meant to cancel.
In the 2025 draft, federal tax before credits is $11,989.90. The dividend tax credit plus personal credits supply $13,774.41 of relief.
The overshoot — credits with no tax left to absorb — simply evaporates. Meanwhile every RRSP dollar “spent” to create that overshoot was worth 48¢ next year, when $207,000 of grossed-up dividends will sit in Ontario's surtax band.
$0 of non-refundable credit destroyed in the 2025 draft — a quiet signal that the RRSP deduction is parked in the wrong year.One receipt,
two years — slide it
The CRA lets unused RRSP contributions carry forward indefinitely. So the $81,271.67 of total deductible room can be split between 2025 and 2026 in any proportion. Every split is a different total tax bill. This is the entire valley, computed live from the actual return.
Edit the case file change any T1 line or next year's income — the valley, optimum and filing instruction recompute live Open the editor
Carry $4,473.67 forward and deduct it against 2026's $207,000 of grossed-up income.
Why the valley floors at $59,017
Push the slider right of the optimum and each shifted dollar saves about 30¢ in 2025 but surrenders 48¢ in 2026 — Ontario surtax, the 29% federal bracket and the basic-personal-amount clawback all stack on those dividends. That's the cliff.
Push left and 2025 climbs into its own surtax faster than the 2026 dividend credits can give anything back — a gentle drift upward. The floor sits exactly where 2026's dividend credits are fully used and not a dollar wasted.
Three ways to file
the same numbers
Identical income. Identical receipts. Identical software. The only variable is judgment about when — and it moves the two-year bill by 40%.
All-in 2025
Deduct $80,325 now $0 Two-year taxThe draft
Deduct $76,798 · as prepared $0 Two-year taxThe split
$59,017 in 2025 · $22,255 in 2026 $0 Two-year taxSame receipts. Same income. $5,250 apart.
How we read
a draft
Every Capital Assist review runs the same discipline — software for the arithmetic, a human for the strategy, and a model for everything the forms won't tell you.
- Rebuild the return from slips — our model reproduced this draft to the penny ($959.36) before we touched a single assumption.
- Project the next twenty-four months — dividends planned, room accruing, brackets indexing, credits expiring.
- Sweep every legal allocation — all 80,325 possible RRSP splits were costed; the valley above is the complete answer, not a rule of thumb.
- File the cheapest true return — and document why, so the recommendation survives a CRA question.
Assumptions & limitations. 2025 figures are taken from the draft T1 (file RC-25-103) prepared by Capital Assist Professional Corporation, June 11 2026: Ontario resident, non-eligible dividends of $126,500 (taxable amount), interest $21,006.42, net self-employment $5,259.26, RRSP deduction limit $80,325. The 2026 projection assumes $150,000 of eligible dividends (grossed-up $207,000) and no other income; 2025 brackets and amounts indexed ≈2%; lowest federal rate 14%; eligible dividend credits at 15.0198% federal / 10% Ontario of the taxable amount; Ontario health premium per the published table. Alternative minimum tax was tested and does not apply in either year (adjusted taxable income remains under the AMT exemption). CPP on self-employment earnings ($209.36) is invariant to the allocation.
This page is an illustration of planning methodology, not tax advice. Outcomes depend on facts, law and rates in force at filing. Figures will be re-verified against the client's Notice of Assessment and 2026 slips before any amendment is filed.