March 5th, 2024
Posted on January 31st, 2022 in Construction & Real Estate, Domestic Tax
For a number of years the government has given taxpayers the ability to split certain pension income with their spouse when filing their tax returns. Taxpayers can also contact Service Canada and ask them to split their monthly Canada Pension Plan payments. As a result, many people wonder if there are still advantages of contributing to a spousal Registered Retirement Savings Plan (RRSP). Let us look at some reasons why spousal RRSPs still do make sense.
To refresh your memory, spousal RRSPs were originally designed to allow the high-earning individuals to contribute to their spouse’s RRSP but claim the deduction themselves. When it comes time to withdraw the funds from the RRSP, the money will be taxed in the hands of the spouse. However, there is one key item of note. The last contribution must remain in the plan for at least two calendar years after the year in which it was deposited.
Here are some reasons a spousal RRSP may make sense for you:
For more information on using a spousal RRSP, contact a DJB Tax Professional.
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