The only thing that Canadians get is a tax deducation from "Total Income" on their return. Some people say the deduction is off Taxable Income, not right though - there is a diff between: Total Income,Net Income and Taxable Income
Anyway, getting back to my question, let's say for example your Total Income is 100,000. You decide to contribute 12,000 to your RRSP. Let's assume your marginal tax rate is 40%. So by contributing the $12,000 to yor RRSP you SAVE on your Tax Payable by $4,800. This I understand from the following calculation: Taxes w/o RRSP ded. = $40,000 - Tax w/ded $35,200 or (40000-35200) = $4,800
IBut why do people say you actually get a Tax "refund" of $4,800??
They think this is like a big fat cheque from CRA in the amount of $4,800. Is it???????????
Do you actually get "cash back" in the amount of $4,800 IN ADDITION to saving on your taxes by $4,800???. So then isn't this the SAME thing as getting to keep $9,600 right now???
please verify thanks
2007-02-15
08:22:16
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6 answers
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asked by
jaymay2008
3