Q&A With Gordon Pape: Will A Spousal RRSP Reduce My Tax Bill?


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Will getting a spousal RRSP help this reader reduce his tax bill?

Q – I need your help. I am on a pension of around $70,000 plus CPP. I just retired and had a payout in 2018. I’m doing my taxes and as of now will be paying around $6,000. My question is should I get a spousal RRSP to differ the taxes or just pay them now and get it over with. Looking forward to your response. – Mike H.

A – The one-time payout clearly puts you into a higher tax bracket so contributing to a spousal RRSP makes sense if it appears your spouse will have a lower marginal rate in the future. You’ll earn a refund now at the higher tax level, but your spouse will presumably pay tax at a lower rate when the money comes out. In the meantime, the contribution will earn tax-sheltered income.

Unfortunately, it’s too late to claim a deduction for 2018. The deadline was March 1. But you can open the spousal plan now and claim a deduction for 2019 when it comes time to file your taxes next year. – G.P.

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