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Don’t contribute to your RRSP until you read this!

Contributing to an RRSP is always a great move, right? Not so fast. RRSPs reduce your taxes by sheltering income from tax when you contribute. You will pay the income tax later when you withdraw the funds, which is ideally when they’ve had a few years to grow (tax-free), and when you’re in a lower [...]

By |January 13th, 2023|Tax Education, Two Minute Tax Tips|Comments Off on Don’t contribute to your RRSP until you read this!

RRSPs: What you should know if your income is low

So it’s RRSP season again, and you’re trying to decide how much (if anything) to contribute this year. This is especially a question if you didn’t end up earning much. Here are the top three things you need to know about RRSPs in a low-income year. 1. RRSPs are less helpful to people with low [...]

What is a Spousal RRSP Contribution?

Definition of a Spousal RRSP Contribution: A situation in which a person makes a contribution to his or her spouse’s RRSP. The contributor uses his/her contribution room, and reports the contribution on his/her tax return, thus saving income tax at his/her rate. What is the advantage of a Spousal RRSP Contribution? A couple can maximize [...]

What is a Marginal Tax Rate?

Marginal Tax Rate: The tax rate that applies to your highest-taxed dollar. Used to calculate the tax impact of additional earnings. The Marginal Tax Rate relates to the fact that in a progressive tax system like Canada’s, the more you earn the harder your income is taxed. While some people think this means that once [...]

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