RSP Deduction

by Barb
(Canada )

Hello,

I am thinking about buying an RSP this year.

How much should I buy to get back a refund on my income tax?

I usually do not have to pay additional tax as I have enough deducted off during the year.

Thanks.




Hi Barb,

This site was developed to support small business owners who work from home ... so it doesn't really cover personal tax. So I'm going to answer this question indirectly.

I have a sidebar chat on marginal tax rates vs. average tax rates. At the end of this chat, I explain how to determine your tax savings from making an RRSP deduction.

Also, my favorite tax site has an RRSP calculator that could help you out.




I am currently reading the Evelyn Jacks book, Make Sure It's Deductible. In the first chapter she discusses the reasons Canadians pay too much tax ... one of which is allowing employers to deduct too much in source deductions.

To avoid this, you can request a reduction in withholding taxes on income using the CRA form T1213 Request to Reduce Tax Deductions at Source.

Reasons you might choose to complete this form include high medical expenses, large charitable donations, regular RRSP contributions, child care expenses or claiming of the caregiver amount.




I hope this helps you out ... and thank you for visiting Bookkeeping-Essentials.

See you on the next page ... Your tutor Lake :0)