What can you do with RRSP contribution room for a spouse with no income?
Anything useful you can do with it?
Mar 19th, 2015 12:20 pm
Mar 19th, 2015 12:25 pm
use it another year when she has income. (Maybe next year?)Luckyinfil wrote: ↑Anything useful you can do with it?
Mar 19th, 2015 12:30 pm
Mar 19th, 2015 12:30 pm
Mar 19th, 2015 12:34 pm
Mar 19th, 2015 12:47 pm
Mar 19th, 2015 12:52 pm
If you're eligible for the Family Tax Cut and don't hit any of the various limits, have the spouse make a contribution and get a refund at the marginal tax rate after the income splitting.Luckyinfil wrote: ↑Anything useful you can do with it?
Mar 19th, 2015 12:53 pm
Not a good idea if you qualify for the FTC and haven't hit the limits on it. In that case, the zero-income spouse withdrawing the money reduces the other spouse's FTC by the after-splitting marginal tax rate.
Mar 19th, 2015 1:07 pm
Mar 19th, 2015 1:08 pm
Mar 19th, 2015 1:12 pm
Then the RRSP room is kind of a waste?Luckyinfil wrote: ↑What if they never plan on working or never plan on making more than their income during retirement?
Mar 19th, 2015 1:24 pm
Mar 19th, 2015 2:19 pm
Mar 19th, 2015 2:37 pm
you're missing the lost 'spousal amount' credit (11 138*15%). In Qc its arounds 3000 $ with the provincial credit so a 10 000 $ withdrawal would cost 30 %, not a good idea at allbubak wrote: ↑You could also use the RRSP as an extra TFSA.
You say the spouse has no plans to ever work again.
So the spouse contributes, gets $0 refund. Money grows tax-free. Many years later, the spouse still has $0 income, withdraws at most $10k per year, so is within the basic personal amount, and therefore pays $0 tax.
$0 refund going in, $0 tax coming back out, tax-free growth within the RRSP. It's just like an extra TFSA.
Of course, if you have any TFSA room, it's better to use a real TFSA, since you don't have to limit yourself to $10k per year in withdrawals. But if your TFSAs are maxed, it's like a way to get a little bit more TFSA.
There is currently 1 user viewing this thread. (0 members and 1 guest)