Hello,
Canadian Citizen living in New Zealand for the last 2 years, since January 2020 and have not made income in Canada since leaving. August 2021 I received a payout of ~$25k for an ICBC (BC Auto Insurer) incident. The money is now in my Canadian account and would like to put into my RRSP's which I currently already have going and invested.
2021 RRSP Deduction Limit is ~47k.
Would like to know if I dump this money in my RRSP's will I have to file taxes for this year now? Also, what's the likely outcome of my taxes if I do have to file, refund or additional payment? Given I haven't been making income in Canada.
The settlement money was not taxed, I thought part of the deal with RRSP's is that you're lowering your tax bracket by moving income into RRSP's, then paying when you take it out later ideally after retirement. However my income is $0 and I will be putting ~25k into an RRSP? How do I lower that tax bracket? What happens if I want to take this specific ~25k settlement money out before retirement if it wasn’t taxed?
I think I'm ok to do this, just want to know my particular implications.
Cannot place into TFSA as I am no longer a Canadian Tax Resident.
Regards,
Canadian Citizen living in New Zealand for the last 2 years, since January 2020 and have not made income in Canada since leaving. August 2021 I received a payout of ~$25k for an ICBC (BC Auto Insurer) incident. The money is now in my Canadian account and would like to put into my RRSP's which I currently already have going and invested.
2021 RRSP Deduction Limit is ~47k.
Would like to know if I dump this money in my RRSP's will I have to file taxes for this year now? Also, what's the likely outcome of my taxes if I do have to file, refund or additional payment? Given I haven't been making income in Canada.
The settlement money was not taxed, I thought part of the deal with RRSP's is that you're lowering your tax bracket by moving income into RRSP's, then paying when you take it out later ideally after retirement. However my income is $0 and I will be putting ~25k into an RRSP? How do I lower that tax bracket? What happens if I want to take this specific ~25k settlement money out before retirement if it wasn’t taxed?
I think I'm ok to do this, just want to know my particular implications.
Cannot place into TFSA as I am no longer a Canadian Tax Resident.
Regards,