MikiU

RRSP

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Go by what your last CRA NOA advises you for unused deduction room. If you have space available from prior years, you can contribute to the RRSP and deduct it from your income for tax purposes. BUT be careful. If your marginal tax rate today is X and your marginal tax rate when you start withdrawing at age 72 is also X (or even higher than X), you won't gain anything...beyond a few years of tax deferral for income earned during that period.

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Hi,

I am getting an error when i enter my RRSP amounts/contribution that my limit has been exceeded by $2,000. I don't understand and if someone can explain i would appreciate it:

 

From my Notice Of Assessment:

RRSP Deduction limit (A): 11,467

Unused RRSP contributions previously reported & available for 2016 (B): 6,543

Mar 2016 to Dec 2016 contribution: 5,241.25

Jan 2017 to Dec 2017 contribution: 2,785.76

 

Is this an error in Ufile or am I going to have to withdraw some money? It doesnt say how much it is over by. Please help

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This has come up on financial discussion forums. UFile seems to incorrectly make an assumption on the RRSP Worksheet that Jan and Feb 2017 contributions are all for tax year 2016. As I understand it, individuals may be simply choosing to ignore the warning and move on with their tax return. That said, UFile needs to fix that so that an individual can assign the portion being used for a 2016 contribution and the portion being used for a 2017 contribution. 

 

UFile: Are you out there and paying attention to this thread?

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Hello,

if i have no employment income anymore, being retired, but unused rrsp space, can i deduct it or not?

MU

If the CRA NOA from last year says you have unused contribution space, you can indeed make a contibution and thus a tax deductible deduction. However, you may not wish to do that IF your current marginal tax rate might be less or equal to your expected marginal tax rate when you start making RRSP/RRIF withdrawals. In other words, why would you want to make a contribution and take a deduction at a 28% tax rate today when you might be in a 32% tax rate when you do your RRIF withdrawals in 5-10 years?   The value of the tax deferment may actually be negative.

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