Back to Home PageWelcome Guest! Register | Login | Home | Contact Us | Site Map | Advertise | FAQ | Search
Canadian Desi
    Charcha




  Canada > General > General > Unused RRSP
Last Post | Newest Post
 
< [ 1 ] >

Unused RRSP

 
ashish_8602
Junior Desi
Member since: Jan 04




Posts: 45
Location: Toronto

Unused RRSP
Hi all....

If someone can help me to solve following question:

My spouse bought RRSP in 2006 (for 2005 tax year) which is still unused as her income is lower. This year situation is same, she dont want to used those money for RRSP as her income is lower.

On other side I have to invest in RRSP, can i use those unused money for my RRSP???

OR

Any other way to invest those money for me in RRSP???

Ashish

-----------------------------------------------------------------
AB

 
Last edited by:
Post ID: 116007 17-02-08 17:50:39
Report Abuse
Pramod Chopra
Senior Desi
Member since: Sep 03




Posts: 1254
Location: Scarborough, Canada


Quote:
Originally posted by ashish_8602

Hi all....

If someone can help me to solve following question:

My spouse bought RRSP in 2006 (for 2005 tax year) which is still unused as her income is lower. This year situation is same, she dont want to used those money for RRSP as her income is lower.

On other side I have to invest in RRSP, can i use those unused money for my RRSP???

OR

Any other way to invest those money for me in RRSP???

Ashish



If your spouse does not want to use her 'undeducted contribution' towards 2007 tax year then you can let this undeducted contribution carried forward for future years till such time it is beneficial for her to use this in her tax returns. This way the RRSP would get the benefit of coumpounding and keep on growing.

For your self you can either contribute from your own funds or can avail of the RRSP loans available at a low rate of prime - 1.00%.

However, if you do not wish to avail of the RRSP loan and also do not wish to contribute from your own funds, then you can ask your spouse to withdraw funds from her RRSP account and you can contribute the same amount in your RRSP, but in this case the RRSP withdrawal amount would be added to her income and based on her present income she can decide whether to use her undeducted contribution this year or in future years.

I hope this makes things clear. However, should you still have any questions, you can post here or email me.



-----------------------------------------------------------------


Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

Contact me:
LINK LINK


 
Post ID: 116045 18-02-08 18:45:07
Report Abuse
investpro
Senior Desi
Member since: Nov 06




Posts: 1628
Location: carl sagan's universe


Quote:
Originally posted by Pramod Chopra

Quote:
Originally posted by ashish_8602

Hi all....

If someone can help me to solve following question:

My spouse bought RRSP in 2006 (for 2005 tax year) which is still unused as her income is lower. This year situation is same, she dont want to used those money for RRSP as her income is lower.

On other side I have to invest in RRSP, can i use those unused money for my RRSP???

OR

Any other way to invest those money for me in RRSP???

Ashish



If your spouse does not want to use her 'undeducted contribution' towards 2007 tax year then you can let this undeducted contribution carried forward for future years till such time it is beneficial for her to use this in her tax returns. This way the RRSP would get the benefit of coumpounding and keep on growing.

For your self you can either contribute from your own funds or can avail of the RRSP loans available at a low rate of prime - 1.00%.

However, if you do not wish to avail of the RRSP loan and also do not wish to contribute from your own funds, then you can ask your spouse to withdraw funds from her RRSP account and you can contribute the same amount in your RRSP, but in this case the RRSP withdrawal amount would be added to her income and based on her present income she can decide whether to use her undeducted contribution this year or in future years.

I hope this makes things clear. However, should you still have any questions, you can post here or email me.





"However, if you do not wish to avail of the RRSP loan and also do not wish to contribute from your own funds, then you can ask your spouse to withdraw funds from her RRSP account and you can contribute the same amount in your RRSP, but in this case the RRSP withdrawal amount would be added to her income and based on her present income she can decide whether to use her undeducted contribution this year or in future years."

Please clarify the above if you don't mind. If she hasn't used the RRSP to claim a tax deduction, why will it be added to her income?
To take a concrete example, If she earns $30,000 and contributed say $3,000 to her RRSP but did not use it for a tax refund, why at a later date would she have it added to her income, if she withdrew it?

I understand from the OP's statement that the spouse has never used the RRSP contributions to reduce her income.


 
Post ID: 116056 18-02-08 23:18:51
Report Abuse
Pramod Chopra
Senior Desi
Member since: Sep 03




Posts: 1254
Location: Scarborough, Canada


Quote:
Originally posted by investpro

Quote:
Originally posted by Pramod Chopra

Quote:
Originally posted by ashish_8602

Hi all....

If someone can help me to solve following question:

My spouse bought RRSP in 2006 (for 2005 tax year) which is still unused as her income is lower. This year situation is same, she dont want to used those money for RRSP as her income is lower.

On other side I have to invest in RRSP, can i use those unused money for my RRSP???

OR

Any other way to invest those money for me in RRSP???

Ashish



If your spouse does not want to use her 'undeducted contribution' towards 2007 tax year then you can let this undeducted contribution carried forward for future years till such time it is beneficial for her to use this in her tax returns. This way the RRSP would get the benefit of compounding and keep on growing.

For your self you can either contribute from your own funds or can avail of the RRSP loans available at a low rate of prime - 1.00%.

However, if you do not wish to avail of the RRSP loan and also do not wish to contribute from your own funds, then you can ask your spouse to withdraw funds from her RRSP account and you can contribute the same amount in your RRSP, but in this case the RRSP withdrawal amount would be added to her income and based on her present income she can decide whether to use her undeducted contribution this year or in future years.

I hope this makes things clear. However, should you still have any questions, you can post here or email me.





"However, if you do not wish to avail of the RRSP loan and also do not wish to contribute from your own funds, then you can ask your spouse to withdraw funds from her RRSP account and you can contribute the same amount in your RRSP, but in this case the RRSP withdrawal amount would be added to her income and based on her present income she can decide whether to use her undeducted contribution this year or in future years."

Please clarify the above if you don't mind. If she hasn't used the RRSP to claim a tax deduction, why will it be added to her income?
To take a concrete example, If she earns $30,000 and contributed say $3,000 to her RRSP but did not use it for a tax refund, why at a later date would she have it added to her income, if she withdrew it?

I understand from the OP's statement that the spouse has never used the RRSP contributions to reduce her income.





Hi Investpro,

To answer your question, I would like to quote hereunder from CCRA's website regarding undeducted contributions. Here is the complete LINK

_________________________________________________________
If you did not deduct all the contributions you made to your RRSP or a spousal or common-law partner RRSP, you have two options:

you can leave the unused contributions in the plan; or

you can withdraw the unused contributions.

In either case, a tax may apply to the unused contributions. For details, see Excess contributions.

If the unused contributions are withdrawn, you have to include them as income on your return. However, you may be able to deduct an amount equal to the withdrawn contributions that you include in your income if you or your spouse or common-law partner received the unused RRSP contributions from an RRSP or RRIF:

in the year you contributed them;

in the following year; or

in the year that you were sent a Notice of Assessment or Notice of Reassessment or a T1028 for the year you contributed them, or in the following year.
You can deduct the amount if you meet all of the following conditions:

You have not deducted, for any year, the unused contributions that you made to your RRSP or to your spouse's RRSP or common-law partner's RRSP.
You have not designated the withdrawal of the unused RRSP contributions as a qualifying withdrawal to have your PSPA certified.
No part of the withdrawn contributions was a lump-sum payment from an RPP, or certain DPSP amounts that you transferred directly to an RRSP. For more information, see Transferring RPP lump-sum payments.
No part of the withdrawn contributions was a lump-sum payment from the Saskatchewan Pension Plan that you transferred directly to an RRSP.
In addition, it has to be reasonable for us to consider that one of the following applies:

You reasonably expected you could fully deduct the RRSP contributions for the year you contributed them or for the year before.

You did not make the unused RRSP contributions intending to later withdraw them and deduct an offsetting amount.

Note
If you or your spouse or common-law partner receives a payment for unused RRSP contributions you made and you deduct an amount under the above rules, we do not consider the unused RRSP contributions to be RRSP contributions after you or your spouse or common-law partner receives the payment. Accordingly, you cannot deduct the amount for any year.

If you meet all of the conditions and have not already withdrawn the unused contributions made in 1991 and later years, you can withdraw them without having tax withheld. To do this, complete Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions.

This form cannot be used to withdraw unused RRSP contributions that were transferred to a RRIF. The financial institution must withhold tax for withdrawals made without Form T3012A.
________________________________________________________


I hope it clarifies further.


-----------------------------------------------------------------


Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

Contact me:
LINK LINK


 
Post ID: 116073 19-02-08 12:50:40
Report Abuse
ashish_8602
Junior Desi
Member since: Jan 04




Posts: 45
Location: Toronto


Thanks Mr. Chopra and Investpro.

Your replies are very much useful for me.

For further clerification,
For example: My spouse's income is $15000, she invested $3000 two years ago. What if she withdrawn $3000 from RRSP let it consider as income total income can be $18000. which is still lower than tax limit.

Upon withdrawn money ($3000), is there any tax apply on that??? or she can get $3000. Any extra form to fill for C.R.A????

ashish

-----------------------------------------------------------------
AB

 
Post ID: 116105 19-02-08 21:33:24
Report Abuse
Pramod Chopra
Senior Desi
Member since: Sep 03




Posts: 1254
Location: Scarborough, Canada


Quote:
Originally posted by ashish_8602

Thanks Mr. Chopra and Investpro.

Your replies are very much useful for me.

For further clarification,
For example: My spouse's income is $15000, she invested $3000 two years ago. What if she withdrawn $3000 from RRSP let it consider as income total income can be $18000. which is still lower than tax limit.

Upon withdrawn money ($3000), is there any tax apply on that??? or she can get $3000. Any extra form to fill for C.R.A????

ashish



Hi Ashish,

Your spouse's total income of $18,000 is not lower than the tax limit and he/she would have to pay some tax on the income.

Your question regarding the extra form is answered in my earlier post.

If your spouse does not want the withdrawal of $3000 from the RRSP (unused contribution) to be subjected to withdrawal tax, then your spouse has to complete Form T3012A, Tax Deduction Waiver on the Refund of his/her Unused RRSP Contributions.

The best thing would be to ask your spouse to withdraw $3000 from his/her RRSP and let it be added to his/her income and simultaneously claim a deduction of $3000 which will nullify the impact of additional income and would get you the tax refund for the amount withheld by the bank for withdrawing money from RRSP.

Any further question, please call me.

Thanks





-----------------------------------------------------------------


Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

Contact me:
LINK LINK


 
Post ID: 116108 19-02-08 22:13:42
Report Abuse
investpro
Senior Desi
Member since: Nov 06




Posts: 1628
Location: carl sagan's universe


Hi Pramod,

Thks the info and the link. Very interesting.




 
Post ID: 116207 22-02-08 06:40:17
Report Abuse
ashish_8602
Junior Desi
Member since: Jan 04




Posts: 45
Location: Toronto

Unused RRSP
Thank you Mr. Chopra for your guidance and help.
-----------------------------------------------------------------
AB

 
Post ID: 116270 23-02-08 14:48:40
Report Abuse
 
< [ 1 ] >
 
Show Printable version
Send this page to a friend
Add to favorites
 


 
Web
CanadianDesi
Please Contribute!
Write an Article
Send Community News
Create Photo and Video Albums
Submit Good Pictures
List Useful Websites
Post Jobs
Submit Events
List for FREE!
Businesses
Classifieds
Social Organizations
Religious Places
Employment Agencies
Email Page
Your Email
Friend\'s Email

Advertise Contact Us Privacy Policy and Terms of Usage FAQ
Canadian Desi
© 2001 Marg eSolutions


Site designed, developed and maintained by Marg eSolutions Inc.