REVscene - Vancouver Automotive Forum

mr_chin · 02-24-2010, 02:30 AM

I was talking to my co-worker about RRSP in cantonese and it was too deep for me to understand fully. I googled it but cannot find any results.

I was wondering, since I didn't work in 2008 and the beginning half of 2009, can I still contribute to RRSP? If I could, should I do it before I file my taxes or after? If I file my taxes before, how will I know how much I can contribute since it is already the 24th and I probably won't get the slip that shows my limit back after March 1st.

Also, if I file my taxes for instant tax returns say at H&R block, and use it to contribute to RRSP, how will I get more refunds?

!SG · 02-24-2010, 05:12 AM

http://www.taxtips.ca/rrsp/rrspcontributionlimits.htm

johny · 02-24-2010, 03:31 PM

if you want rrsp's for the 2009 tax year you have to do it before march 1st.

therefor you do RRSP's before you file taxes... so you can put the RRSP amount onto the tax forms.

if you only worked half the year it's probalby not worth putting any in. put it in when you reach a higher tax bracket. I'd probably put it in for 2010 instead of 2009. how much you get back depends on the tax bracket.

waddy41 · 02-24-2010, 07:45 PM

You can contribute now (2009 tax year) and deduct it later....
contribution and deduction do not have to occur in the same year

however, keep in mind that account charges do add up...
you only worked 1/2 a year so your contribution maximum can't be that high...it might not be worth it to contribute this year depending on your plan fees....

mr_chin · 02-25-2010, 03:55 AM

Quote:

Originally Posted by johny

if you want rrsp's for the 2009 tax year you have to do it before march 1st.

therefor you do RRSP's before you file taxes... so you can put the RRSP amount onto the tax forms.

if you only worked half the year it's probalby not worth putting any in. put it in when you reach a higher tax bracket. I'd probably put it in for 2010 instead of 2009. how much you get back depends on the tax bracket.

i have studiotax and when i enter 2000 into rrsp, i get a little over 500 more back. are these program even reliable?

Gt-R R34 · 02-25-2010, 08:43 AM

Depending how much you acutally Worked, it might be a better idea to put your money into a TFSA instead of a RRSP.

brushit · 03-02-2010, 01:33 AM

Whether to invest in a TFSA or RRSP also depends on when do you think you are going to withdraw the money. Generally if you think you might need the money in the near future while you are in a higher tax bracket(buying a car, travel etc), it's better to invest in a TFSA. Otherwise, you are usually better off putting money in a RRSP and get the tax refund.

CRS · 03-02-2010, 05:57 PM

Quote:

Originally Posted by Gt-R R34

Depending how much you acutally Worked, it might be a better idea to put your money into a TFSA instead of a RRSP.

This.

TFSA is a yearly thing that has limits and no go backs. Whereas RRSPs will accumulate. Unless you're making some good money there is no point in RRSPs so just save it up since you shouldn't be taxed that much anyways.

RRSPs only make sense when you are making enough money that you need to save on via tax credits. Otherwise, it would be relatively pointless.

waddy41 · 03-03-2010, 08:03 PM

^ not really...
you can put contribute to a rrsp NOW and let your gains/interest grow tax free
Deductions do not have to be in the same year, so you can defer the tax credit for when you're making more money...

wouwou · 03-04-2010, 11:59 AM

Quote:

Originally Posted by CRS

This.

TFSA is a yearly thing that has limits and no go backs. Whereas RRSPs will accumulate. Unless you're making some good money there is no point in RRSPs so just save it up since you shouldn't be taxed that much anyways.

RRSPs only make sense when you are making enough money that you need to save on via tax credits. Otherwise, it would be relatively pointless.

I thought TFSA will also accumulate, the same way with RRSP?

waddy41 · 03-04-2010, 07:26 PM

^ i thought the same thing.....
+5000 each year and you are free to take it in and out as you please....?

subordinate · 03-05-2010, 12:37 AM

If you contribute a max of 5000 and take some out during that same year, then you lose that contribution room. You can't put back an equal amount you took out that year. You will just have to wait the next year i.e: X+5000.

''The TFSA contribution room is made up of:''
■
your annual TFSA dollar limit ($5,000 per year plus
indexation, if applicable);
■
any unused TFSA contribution room* in the previous year;
and
■
any withdrawals made from the TFSA in the previous year,
excluding qualifying transfers*.

CRS · 03-05-2010, 08:42 AM

Quote:

Originally Posted by waddy41

^ not really...
you can put contribute to a rrsp NOW and let your gains/interest grow tax free
Deductions do not have to be in the same year, so you can defer the tax credit for when you're making more money...

But then again, what would be the point?

You're just making more work for yourself and putting less money in your pocket to begin with.

misteranswer · 03-05-2010, 08:20 PM

Quote:

Originally Posted by CRS

But then again, what would be the point?

You came about a large inheritance and you already maxed out your Tax Free Account.

subordinate · 03-06-2010, 12:09 AM

Quote:

Originally Posted by CRS

But then again, what would be the point?

You're just making more work for yourself and putting less money in your pocket to begin with.

Exactly, RRSP's only defer taxes until you finally have to use it as a source of income, where usually, your income tax bracket will be a lot lower.

Similiar thoughts with CRS, that maxing out contributions yearly in a RRSP for individuals who don't make a lot of money is not the best thing to do.

------------

Quote:

Originally Posted by misteranswer

You came about a large inheritance and you already maxed out your Tax Free Account.

Use a chunk of the cash to buy flow-through shares of a CDN natural resource company to reap the tax credits. Just hope the shares go up.

and then use the rest of the money for hookers and blow?

CRS · 03-06-2010, 12:10 AM

Quote:

Originally Posted by misteranswer

You came about a large inheritance and you already maxed out your Tax Free Account.

Doesn't that just drop on your lap everyday...

johny · 03-06-2010, 08:39 AM

Quote:

Originally Posted by subordinate

Exactly, RRSP's only defer taxes until you finally have to use it as a source of income, where usually, your income tax bracket will be a lot lower.

the big risk with this is that in 30 years from now the income tax brackets will probably be at around 80% because the country with have so much debt and be so screwed. and everyone will actully be getting less money back then what they put in!

misteranswer · 03-07-2010, 04:39 AM

Quote:

Originally Posted by CRS

Doesn't that just drop on your lap everyday...

Nope, but I'm sure if you're creative enough you yourself can probably think of a whole bunch of different reasons and points for doing it.

waddy41 · 03-10-2010, 10:25 AM

Quote:

Originally Posted by subordinate

Exactly, RRSP's only defer taxes until you finally have to use it as a source of income, where usually, your income tax bracket will be a lot lower.

Similiar thoughts with CRS, that maxing out contributions yearly in a RRSP for individuals who don't make a lot of money is not the best thing to do.

Depends....if the OP`s contribution room is large, like 10K or something (because he had income over the past few years) then it would be worth it to contribute now...
your RRSP future value is higher if you contribute earlier...

But if the OP`s contribution room is small, then it would not be worth all the fees and hassle to contribute now..

You can apply the RRSP tax deduction to your income anytime after you`ve made the contribution..