Posted on: 13-03-09 16:34:27
hey all,
ever since I have been investing in RRSP, I have been following a Jan to Dec schedule when claiming the deductions in my tax return.
what I mean is, even though I contribute monthly, when filing taxes, I claim my contributions from the previous years' Jan to dec only.
The contributions made between Jan and Feb of current year I claim next year.
So if between Jan and Dec 2008, I contributed $10,000 and contributed $2,000 during Jan and Feb 2009, I claim only $10,000 in 2008 tax return.
During Mar and Dec of 2009, if I contribute $8,000, I will claim the $2000 + $8000 = $10,000 in 2009 tax return next year.
My question is whether this is ok or not.
Am I inadvertently doing something wrong and should I follow a Mar to Feb schedule for RRSP or is Jan - Dec ok?
Many thanks
Quote:
Originally posted by NewDesiInTown
hey all,
ever since I have been investing in RRSP, I have been following a Jan to Dec schedule when claiming the deductions in my tax return.
what I mean is, even though I contribute monthly, when filing taxes, I claim my contributions from the previous years' Jan to dec only.
The contributions made between Jan and Feb of current year I claim next year.
So if between Jan and Dec 2008, I contributed $10,000 and contributed $2,000 during Jan and Feb 2009, I claim only $10,000 in 2008 tax return.
During Mar and Dec of 2009, if I contribute $8,000, I will claim the $2000 + $8000 = $10,000 in 2009 tax return next year.
My question is whether this is ok or not.
Am I inadvertently doing something wrong and should I follow a Mar to Feb schedule for RRSP or is Jan - Dec ok?
Many thanks
What you are doing is not correct. You should follow the Mar to Feb schedule. Reporting contribution is not the same as claiming deductions.
Let us assume that you contribute $1000 every month to your RRSP in year 2008 and continue the same in year 2009 as well.
Then the receipt you got for $2000 for the first 60 days of 2008 should have been claimed in your 2007 tax year return.
Your bank would also send you receipts for $10,000 for contribution for the remainder of the year 2008 and again a receipt for $2000 for contributions made in the first 60 days of 2009. Now you will claim (report) this total $12,000 in your 2008 tax year as your contribution.
Of course, out of this contribution you can claim deduction for either whole contribution or for partial contribution and carry forward undeducted contribution for future years.
I hope this clarifies.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:Thanks, Mr. Chopra.
Originally posted by Pramod Chopra
Of course, out of this contribution you can claim deduction for either whole contribution or for partial contribution and carry forward undeducted contribution for future years.
I hope this clarifies.
So how do I fix this now?
For 2009 tax return, should I report all contributions from Jan 2009 till Feb 2010?
Quote:
Originally posted by NewDesiInTown
Quote:Thanks, Mr. Chopra.
Originally posted by Pramod Chopra
Of course, out of this contribution you can claim deduction for either whole contribution or for partial contribution and carry forward undeducted contribution for future years.
I hope this clarifies.
So how do I fix this now?
For 2009 tax return, should I report all contributions from Jan 2009 till Feb 2010?
If you have already filed your 2008 tax year return, you should do a T1 Adj http://www.cra-arc.gc.ca/E/pbg/tf/t1-adj/t1-adj-08e.pdf and and send it to them along with copies of your RRSP receipts for your contributions made in the first 60 days of 2009.
Next year when you file your 2009 tax return, then you should report all the contributions made in remainder of 2009 and the first 60 days of 2010 with a completed copy of schedule 7 and every thing would be fine.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
