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Discussion Starter #1
Hello.
This year I plan to catch up on all of my, and my wife's, unused RSP room.
I have about $47,000 and my wife has about $37000. I will still remain in the top Ontario tax bracket if able to use all of both amounts.
My wife is a stay at home mom and her only income iin 2009 was the federal child benefit of $100 per child per month for a toal of $2400.

When entering my total RSP contribution amount of $47,000 on UFile last night it showed a refund of approximately 46.?% which seems fine. When I entered the $37,000 sum in the spousal RSP contribution on the same page on UFile the refund amount didn't change. I am obviously missing something.

Can anyone clarify what I'm doing wrong. I'm sure it is simple but I am no accountant.

Thanks for any help that can be provided.
 

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Clarification- Is the $47,000 your contribution room, and the $37,000 your wife's contribution room?
If so, you can use the 47,000, but you cannot use the 37,000 as only your wife can use it on her tax return.
 

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Clarification- Is the $47,000 your contribution room, and the $37,000 your wife's contribution room?
If so, you can use the 47,000, but you cannot use the 37,000 as only your wife can use it on her tax return.
Indeed. You can only contribute to an rrsp or a spousal rrsp using your own contribution room. When you make contributions to a spousal rrsp it still applies against your own contribution room.

Your wife's contribution room is relatively worthless unless she goes back to work.

Sounds like you made a ton of money last year - kudos!
 

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Discussion Starter #5
FT
My income was just over $350,000 last year. I love your site by the way. I visit it daily.

Stardancer
That's correct. The $47,000 is mine and the $37,000 belongs to my wife. I was hoping there would be a way to use some of her room too. My sons are 4 and 1 1/2 yrs old so she won't be going back to work for a while. I guess we'll just have to wait until she does.

FourPillars
Thanks for the information. I guess I'll have to get the missus back to work ASAP!!:D I visit your site every day as well. Great site!
 

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Well...one way to income-split in this situation is to loan your wife money to invest. You can also give her money to contribute to a TFSA.
 

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Discussion Starter #7
Money gal.
We've maxed out our TFSA accounts. Mine are invested in TD e-series index funds. My wife has her's in 5 year GIC's.
Can you elaborate on loaning my wife money to invest? If I loan her money to invest in RSP's when she's not working she won't get the tax back.
 

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Is your wife planning to have earned income in the future? The way I understand it (someone please correct me if I am wrong) your wife can contribute to her RRSP and defer claiming the contribution until future years when it make more sense tax-wise. At least this way the money would be working tax-free, right?
 

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With $350K annual income you should be consulting an accountant, not seeking advice on-line. Especially since you didn't even understand what a spousal RRSP is. (I know - you didn't get to a $350K income by throwing money away on so-called experts, but sometimes it's worth your while to pay for professional advice.)
Disclaimer - I am not an accountant.
 

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Not loaning her money to invest in an RRSP. Loaning her money to invest in an open account.

You set up the loan at the prescribed rates (currently 1%, never needs to be re-set), she pays you interest at the prescribed rate, and thus the gains are fully taxable in her hands. This is a way to move money into her hands from yours and is a very simple tax-minimization strategy (if you have investments outside registered accounts, obvs). It has nothing to do with retirement planning, per se.
 

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FT
My income was just over $350,000 last year. I love your site by the way. I visit it daily.

Stardancer
That's correct. The $47,000 is mine and the $37,000 belongs to my wife. I was hoping there would be a way to use some of her room too. My sons are 4 and 1 1/2 yrs old so she won't be going back to work for a while. I guess we'll just have to wait until she does.

FourPillars
Thanks for the information. I guess I'll have to get the missus back to work ASAP!!:D I visit your site every day as well. Great site!
$350k! You rock!

Thanks for the kind words - sometimes I wonder if anyone is reading the site so it's nice to read that sort of comment.
 
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