loyola

Urgent!


I have a problem when I prepare my tax return.

I purchased my RRSP before my T4 was reached me. when I prepare my tax return, I was told that I overcontributed my RSSP! What should I do? go to the bank and ask them to reduce my RRSP or just use the max quot I can use?


waiting for your suggestion!

Tiggr

If it's not over 2000, it's fine.

Currently, individuals who were at least 18 years of age in the preceding year are allowed to over-contribute to their RRSPs by up to $2,000 without incurring the monthly 1% penalty tax. You cannot claim a tax deduction for the overcontribution in the taxation year it is made but you can wait until new RRSP contribution room is available in a future year and deduct the overcontribution in that year.
NOTE: For planholders with overcontributions in excess of $2,000 as at February 26, 1995, transition rules allow the excess to be kept and deducted against future RRSP contribution room (to a maximum of $6,000) rather than forcing immediate withdrawal of the excess.

春雨秋风

In addition, if you already have RRSP over-contribution above $2000, you still have other ways to "consume" it.

Examples include:

- withdraw part or all to purchase your first self-live-in house/apt/condo, this is called HBP (Home Buye's Plan)
- transfer part or all into your life-long education plan

If your English is good, the CRA website ( http://www.cra-arc.gc.ca/ ) has all sorts of "official" info on all sorts of subjects.

loyola

thank you guys' idea. actually, this is my first time purchase my RRSP. in my last years statement, it said I had 1090 unused RRSP (line A), and 0 for line B. I started my current job last year, based on salary I purchased about 2500$ RRSP. if the RRSP can account for 18% of my salary. it should not overcontribute the RRSP quota. but the Ufile only chose my 1090$ as my RRSP and gave me an error message saying "Overcontribution".

Post by Tiggr
If it's not over 2000, it's fine.

I guess my situation should be OK then.


thanks again.

jasperlin

RRSP constribution limit is the lesser of:

annual limit: 15,500 for 2004
Actual contribution-pension adjustment + unused room
18% of your previous tax year (2003) - PA + unused room

government will give u rrsp statement so u could use that amount to buy rrsp.

but u're ok since not exceed 2000 overcontribution limit