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)



Comments for RSP Deduction

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Jan 08, 2012
 Personal Income Tax
by: Maria

This is a personal question about personal income tax (if you're fine to answer it :).

Is it true that a person who has more than two part-time jobs pays a higher income tax than a person who has one full-time job.



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Hi Maria,

I don't normally answer personal tax questions on this site but to give you a very general response to your question ...

It is possible that the payroll tax deductions from two part-time jobs may be more than is required for deductions for someone with one full-time job, particularly if you haven't completed your TD1 correctly for the second employer.

You will receive any overpayments on CPP premiums, EI premiums and income tax withholdings back when you file your return.

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