Saturday, February 26, 2011

RRSP contribution refund calculator

A friend of mine called last week and wanted to know how much refund she would get for RRSP contribution. She needed the information to decide on how much RRSP loan she is going to apply for. The refund one would get will depend on the marginal tax rate of that person. But it is not a simple answer as the marginal tax rate will go down when your income less (that is when you RRSP contribution reduces your income). Therefore you may get less refund that what you calculated based on marginal tax rate.

Here is a calculator by Ernest & Young that can calculate the RRSP refund (please these are approximate number).

If you need actual number you need to do the tax return for both scenarios (without RRSP contribution and with RRSP contribution)

Please note the deadline for RRSP contribution for 2010 is March 1st 2011.

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