Tax FAQ
 

Ontario–Payroll Tax Deductions: Is A Company Bonus Taxable If I Transfer The Full Amount To My Work RRSP?

Question by New Mommy | Posted in Canada

At the end of each year I clear a bonus from my company.
When this bonus is paid out to me, I get hit with high payroll tax deductions.

I was told that if I put this prosperous towards my company’s RRSP program that I currently participate in, the “full” bonus amount goes forthright into my RRSP with no taxes deducted from the bonus amount … is this correct?

Any information is much appreciated!

Answer: It is comme il faut. Your employer does not have to withhold tax on any amounts that are transferred directly into an RRSP. Your employer has to be agreeable to do this for you, and they have the right to ask for proof of your RRSP limit for the year.

This would not stop them from withholding CPP and EI premiums. However, if your bona fide income is over $45,000, you would have reached the cap on those anyway, and won't have to worry about that either.
 
 

If I Make A Large RRSP Contribution, Can I Get A Refund Larger Than The Income Tax Deducted From My Pay?

Question by Maple Rose | Posted in Canada

For illustration, say I had $5,000 income tax deducted from my pay in 2007. I contribute $20,000 to my RRSP. My tax software says I will get a refund of $5,600. Will that find? ...or will I get a refund only equal to the $5,000 deducted from my pay?

Answer: There are some gaps in gen you provided. Normally the amount you can contribute to an RRSP has certain limits.

Basically you have contribution leeway created by having earned income in previous year (2006) which is lesser of $18,000 or 18 percent of earned receipts (wages, rent etc.)

You can carry forward unused balances from previous years
Is there flat to make that contribution?

If you had only $5600 deducted current year and similar amounts

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How Do I Collapse My RRSP With Minimal Tax Liability?

Question by Taxed | Posted in Canada

- I have been self-employed for decent over a year
- Four months ago I bought a franchise but my earnings during the first year are expected to be gaunt
- I am 53 and married
- I am contemplating taking advantage of my low tax bracket and collapsing my RRSP to lay out in real estate instead
- I am aware of the DSC implications which may necessitate a phased withdrawal
- My RRSP asset consists of mostly stocks and reciprocal funds

Answer: There is cerebration that the real estate market will fall sharply in Canada within the next couple of years. Of process this is only speculation, but it could be a big risk for you. Why would you want to collapse your RRSP to invest in real estate when the markets are genesis to recover and you will miss all the up swing? Are you planning to fully deplete your RRSP? How much $$ are we talking about here? This could be a well-to-do loss on your part with regards to tax. Remember that you will also

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How To Calculate Tax Savings From RRSP Deduction?

Question by curious cat | Posted in Canada

How do you just determine your tax savings from a RRSP deduction? Do you multiply your deduction amount by your marginal tax rate or moving tax rate? How do you calculate your marginal tax rate?

Answer: Individual out your marginal tax rate, then multiply your contribution by that rate.

For example, if you made $150K in Alberta last year, your questionable tax rate is 39%. If you contributed $10K into an RRSP, you would get $3900 back.

If your deduction drops you into another combine, the math gets tricky (if you made $73K in Alberta, and made the same contribution, since up to $72,757 is 32% and above is 36%, some of your contribution would lay you tax in each bracket).

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RRSP's: Is There An Equation To Calculate Tax Savings From An RRSP Contribution Of X Amount Of Dollars?

Question by Vince C | Posted in Canada

I'm looking for an equation, not an automated abacus (ie: not E&Y) for Ontario tax savings for x amount of RRSP contributions and based on a z earning salary.

Answer: There is none, unless you necessity to create a complicated formula (say in Excel) which references all the various tax brackets. That can get very ornate, since provincial rates and brackets no longer match Federal brackets. You'd also have to comprehend any other deductions that apply to you.

Without knowing all your financial details, it's impossible to tell, but in broad, your marginal tax bracket (the amount you'll pay on your next dollar of earnings) will often work as the

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5 Benefits Of Registered Retirement Savings Plans Or RRSP In ...

by Arjun Rudra

8 to be slightly more conscientious ) Canadians currently delightful help of the federal rule’s most lavish attitude of tax succour – the Registered Retirement Savings Procedure – commonly known as the RRSP , then you already recall what we’re talking about. Then, when you’ve made capital on that investment, through interest earned or property gains, the ministry tells you that you don’t have to pay tax on it. Keep the profits, they say. What if there was a way that you could get the Canadian administration to pay almost half of the wherewithal you needed to espy an investment (be it for the hold of stocks, reciprocal funds, guaranteed investment certificates, mortgages etc. For those of you that don’t but would like to learn more, look over on. A RRSP is a Registered Retirement Savings Design Does that apogee your interest....

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