We all want to save tax. RRSP is one of the best tax saving tools for Canadian residents. You probably know that the more tax you have to pay, the more money RRSP can help you save. However, if you want to know the exact saving amount, you need to do tax calculation based on your income and marginal tax rates.
This RRSP tax saving calculator will do the calculation for you. It helps you quickly estimate the tax saving amount, so it can guide you optimize your RRSP contributions.
The RRSP Tax Saving calculator is only an estimate and is based solely on the information you provide. Please consult your financial advisor before you invest into your RRSP.
Your Annual Income
It includes your employment income, which you can find it on your T4 tax slip box 14, and your self-employment income if you have.
Your RRSP Deduction
It should include your RRSP contribution you want to make, and your pension deduction, which you can find it on your T4 tax slip box 20 if you have a pension plan with your employer.
Before you decide to contribute to RRSP, you should:
Find out your RRSP deduction limit.
This is often called your “contribution room.” Check your latest Notice of Assessment from the Canada Revenue Agency, and you will see your RRSP deduction limit. Don’t contribute more than this limit, or you will have to pay penalty.
Be aware of the deadline.
The deadline for contributing to an RRSP for the 2014 tax year is March 2, 2015.
Know you probably have to pay tax when you take money out from RRSP.
When you take money out from your RRSP, the withdrawl amount will be treated as taxable income. If your income is high at the year you make the withdrawl, you will have to pay more tax than the amount you save. The exceptions are Home Buy Plan and Lifelong Learning Plan.
