We landed here in April 2005. My question is how do we calculate the RRSP eligible amount based on the income that we earned in India before April 2005 and on the income in Canada till december 2005.
Or to be simple, we cannot buy / invest into RRSP as of now?
I know one can carry forward the unused portion of RRSP to subsequent years. But I am thinking in terms of reducing any income tax burden on me in the current year, however small it may be.
Thanks for posting your replies.
Location: God's own country
Posted on: 20-01-06 20:20:57
Hi Iceberg,
You have an allowance of putting $2000 one time in to an RRSP which can be above the max. RRSP that you are allowed. I suggest that you put that for the first time.
I tried this on my wife Income tax return (i put in $1000) since her company paid for the other $1000 and the IT dept. allowed it.
May be other Funda CD members will also put in their though on first time RRSP.
Go to http://www.ufile.ca" rel="nofollow">LINK
open an account (free of charge). Try to put all your income without RRSP and see the tax refund. Now put $2000 as RRSP and see the result. In case you see a significant increase in refund , Go for RRSP. Otherwise you will know that RRSP is waste for that year.
Also you have to buy RRSP within march 01 of each year to be considered for that year.
Thanks for going through my post.
TK
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I am a Gents and not a Ladies.
u cannot do RRSP for this Year - 2005
Once you file your taxes , you would get an RRSP limit for the next year - 2006 which is 18.5 % of your taxable income ..
So put in money after you file your taxes for next year
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We will find a way or we will make one
Location: God's own country
Posted on: 20-01-06 21:55:14
Use the over-contribution limit
In 1995, the government reduced the one-time over-contribution limit to $2,000 from $8,000. The limit is designed to provide a buffer in case you make a mistake in calculating your RRSP contributions.
You can use the $2,000 over-contribution to get ahead of the game and take advantage of tax-deferred growth and compounding in the RRSP. But as you get closer to retirement and withdrawals, make sure that you eventually claim the $2,000 as part of your deduction limit to avoid double taxation.
Check:
http://www.theglobeandmail.com/series/rrsp/2005/neat.html
Thanks for going through my post
TK
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I am a Gents and not a Ladies.
