@torontotaxboutique: RRSP is becoming increasingly popular lately primarily because the funds are "tax-advantaged," meaning that they're exempt from being taxed in the year you make the contribution. However, not everyone can contribute annually towards this attractive financial instrument. You can contribute towards your RRSP fund only after you have earned income and filed a tax return in Canada. We came across clients who told us that they ended up paying penalties before they consulted us because they did not get adequate guidance while filing their taxes. Unfortunately, their employers did their part, matched their contribution, and funded the RRSP. However, it was all for nothing, and they ended up paying penalties as there was no contribution room in their Notice of Assessment. Also note, in such cases, any tax benefits accrued will have to be adjusted (paid back) at the time of tax filing. We strongly recommend contacting us to understand anything related to RRSP and its tax implications. Follow us for more tax tips.

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Monday 09 January 2023 17:10:28 GMT