Quote:
Originally Posted by Cappy
Question for the accountants in here.
My wife ended up having to pay CRA this year. First time she has had to.
She earns a salary and has modest investments (mostly RRSP).
She received two bonuses this year and asked for them to be put in her RRSP (tax deferred). They ended up on her T4 as income and then gets dinged for a few grand in taxes.
This seems wrong to me, no?
The upgrade in income from salary and bonus didn't push her into another tax bracket, so i don't see that account for being under-taxed. So i am assuming its because the Company paid the bonus tax free direct to her RRSP, then counted it as income on t4?
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Are you preparing your own taxes? If so, I'd get help from Locke.
The bonus should be on the T4. There is no such thing as being pushed "up a tax bracket" and under-taxed (see: marginal tax rates) - unless her employer doesn't use payroll software like ADP, etc, but in this day and age I wouldn't think that's the case. All payroll software looks at every marginal new dollar paid and taxes it appropriately (subject to your personal situation, etc).
The obvious non-professional answer here is you're not making the offsetting RRSP contribution deduction you should, if indeed you put it in an RRSP.
If you just said "put it in an RRSP" and they paid it to your bank account like a normal bonus, you're likely SOL for this year. If it is sitting in an RRSP account in cash or something in a brokerage account, then you need to make the RRSP deduction.