Comments on: 2010 RRSP Contribution Limits, RRSP Contribution Deadline and other RRSP FAQs

By: bob

bob — Mon, 09 Jan 2012 19:10:49 +0000

Can I defer taxes to the following year using the following RRSP strategy based on the “first 60 day” rule?:

- January, 2012 – withdraw $14,999 from my RRSP for the 2012 tax year at 10%
- Jan/Feb, 2012 – use the proceeds to help contribute $14,999 to another one of my RRSP’s and claim against income for the 2011 tax year earned at a combined tax rate of 40%

By my calculation this would defer $3000 of my total income tax bill until 2013 (40%-20% x $14,999). I am considering this as I am anticipating a dip in income in 2012, and it would provide cash in hand taxable at a lower rate the following year. This is of course assuming that I don’t plan to otherwise use the available room under my contribution limit.

By: gus

gus — Fri, 14 Jan 2011 22:05:20 +0000

What happens when the rebate from an RRSP contribution is larger than the taxes paid on this years taxable income? Does the person receive a cheque from CRA for the difference?

By: Roger Loomis

Roger Loomis — Tue, 30 Nov 2010 20:29:37 +0000

I'm glad the RRSP limit for contributions is higher than the American limit for 401k plan contributions but it could still be higher. Particularly for those that are near retirement and want to save an additional sum of money in anticipation of using it soon.

By: The Financial Blogger

The Financial Blogger — Tue, 05 Oct 2010 14:37:17 +0000

Hello Lisa, you can do the HBP without paying off your RRSP loan. Banks can’t take legal liens on registered investment

By: Lisa

Lisa — Tue, 05 Oct 2010 00:39:50 +0000

Can I withdraw from my RRSP for the Home Buyer’s Plan if I haven’t finished paying off my RRSP loan? Cna I only borrow the same amount as what I’ve paid back?

THX!

By: The Financial Blogger

The Financial Blogger — Thu, 19 Aug 2010 19:41:43 +0000

@Curious,

odd enough, I would start with your HR department. By challenging them on what they are doing, they may try (or not!) to explain the reasoning behind it.

good luck!

By: Curious

Curious — Thu, 19 Aug 2010 15:45:25 +0000

Thanks – and that is something that I’m also looking into. I was more curious about the delay between the deduction from my pay and the deposit to my account. I didn’t think that an employer could legally hold an employee’s funds for 30 – 45 days without permission. Maybe I’m wrong on that but it doesn’t seem right. Any thoughts on where I might find that info?

By: The Financial Blogger

The Financial Blogger — Wed, 18 Aug 2010 19:23:03 +0000

I guess that as long as the amount deducted on your pay check correspond to the tax amount related to your RRSP contribution for the year, you won’t have any problem.

make sure both match!

By: Curious

Curious — Tue, 17 Aug 2010 17:04:13 +0000

Can RRSP deductions be legally withheld for any period in time?

I work for a large company and while my RRSP deductions are made each pay period, the last 3 payments have not made it into my investment account. I was told that there was a process change and that my deductions will be posted within 30 days of the end of the month that they were deducted. As a result, my July 15th, July 30th and Aug 15th deductions are out in the ether somewhere. This does not sound right? Can anyone point me in the right direction on this?

Thanks!

By: Mama Zen

Mama Zen — Wed, 03 Mar 2010 16:37:58 +0000

Woha thanks to both of you guys ! I obviously now have much stuff to read and no excuses to procrastinate on this file anymore thanks!!!