Personal Finance & Money Asked on July 31, 2021
My contribution room for my RRSP is 23.5k, I accidentally contributed 25k though. I realize my over-contribution is within the 2k that CRA allows, but I would prefer to keep the extra $1,500 outside of my RRSP if possible as I won’t be receiving a tax credit for it.
Am I able to just transfer this $1,500 out? Or will I have to pay tax on the $1,500 if I do this?
Alternatively, if I just leave the extra $1,500 can I claim it next year when my contribution room increases?
Slight side-step to your first question to highlight your second:
"Alternatively, if I just leave the extra $1,500 can I claim it next year when my contribution room increases?"
Yes, you can do this, and I would say it is the recommended approach.
Technically, if you have no fear of miscalculating your RRSP amount, you can happily use the $2k 'buffer' as a way to allow a little bit more of your investment income to have tax deferred to retirement, even though you don't get the immediate deduction for it.
Answered by Grade 'Eh' Bacon on July 31, 2021
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