RRSP ETC

Question 1

RRSP

Answer 1

Registered Retirement Savings Plan

Is a savings plan that you can contribute to over the course of your working life. When you retire, you can convert your account to a Registered Retirement Income Fund (RRIF) and withdraw an income.

You can deduct your taxable income putting money in this savings account.

Available for Everyone

Contributions- Deductible in “Other Deductions”

Withdrawal - 100% Taxable under “Other income” , except for home buyer plan and life long learning plan which are both tax free (Nil)

Question 2

Earned income for RRSP

Answer 2

• Net employment income (excluding employee RPP contributions because earned income does not allow it, usually it would be deducted)
• Business income/Loss
• Rental income/Loss
• Partnership income/Loss
• Spousal support payments (received/paid)

Interest, Dividends, capital gains are excluded from earned income

Question 3

Earned income for RRSP (additions and subtractions)

Answer 3

Additions :

• Employment income (without employee RPP deduction/Contribution)
• Rental income
• Income from carrying on a business
• Royalty income
• Spousal support received
• Research grants
• CPP
• Benefits

Deductions

• Spousal support paid
• Business losses
• Rental losses
• Losses from carrying on a business/Expenses

Question 4

RPP

Answer 4

Contributions

Employer - Not taxable
Employee- Deductible (only from employment income)

Withdrawals

Employee- 100% taxable

Question 5

Pension Adjustment

Answer 5

Total amount contributed in RPP or DPSP by an Employee. This reduces the Individuals RRSP annual limit.