LocationsRegistered Retirement Savings Plan, The Ins and Outs
RRSP deadline is March 11, 2017 for the 2016 taxation year. However, if a person turns 71 in the taxation year, the deadline for the RRSP contribution is December 31. In addition, the RRSP account will be transferred into a RRIF. This information about your RRSP is found in your Notice of Assessment, Notice of Reassessment, or just a phone call away to the Canada Revenue Agency.
Spousal RRSP is another way to reduce taxes. A taxpayer can buy the RRSP based on his/her own contribution limit in his/her spouse’s name and still can get deduction in his/her own tax return. So, one spouse (known as contributor) can contribute to the RRSP of the other spouse (known as beneficiary). An individual may choose to contribute to a spouse’s RRSP, his own RRSP, or both. The total contribution to all RRSPs should not be more than the maximum contribution limit of the contributing individual. The spousal plan is intended to encourage equalizing and/or splitting retirement income between two spouses. Where one spouse is in a lower tax bracket, or has no income at all, the receipts from RRSP (ending of RRSP, an annuity or a RRIF) will be taxed at a lesser rate than would apply to the contributing spouse.
Home Buyer’s Plan deadline is October 01 of the taxation year. The closing date of the home to be bought would have to be before October 01, because otherwise the HBP withdraw would be calculated in the following taxation year. The maximum amount that a person can withdraw from the HBP is $25,000.00. Just remember that the amount has to be paid off in 15 years. And the repayment starts in the second year after you withdrew the funds from your RRSP for the HBP. However, the balance can be paid off anytime before the 15 years end. Your minimum required repayment is a portion of the balance you have left to repay. If the payment is not made, or payment is less than the minimum amount, you will have to include the difference as RRSP income on your tax return. As if you withdrew money from the RRSP. This information about your HBP is found in your Notice of Assessment or Notice of Reassessment.
Lifelong Learning Plan deadline is March of the taxation year for the enrollment in the qualified institution. The maximum amount that a person can withdraw from the LLP is $10,000.00. Just remember that the amount has to be paid off in 10 years. Your minimum required repayment is a portion of the balance you have left to repay. And the repayment starts in the second, third, fourth or the fifth year after you withdrew the funds from your RRSP for the LLP .If the payment is not made, or payment is less than the minimum amount, you will have to include the difference as RRSP income on your tax return. As if you withdrew money from the RRSP. This information about your LLP is found in your Notice of Assessment or Notice of Reassessment.
Any questions or concerns about this article? Feel free to call us at 905-949-2222, send an email to info@taxwide.com or just drop by an office near you to sit down with an expert at no cost!