MCS 2100 Lecture Notes - Lecture 8: Tax Bracket, Life Insurance

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 2100
• Professor: Jian Zhou

Document Summary

Earned income does not include investment income: max contribution is set by the government based on the rate of inflation, unused contribution room can be carried over forward to other tax years, the government does the calculation for you and it is included on the notice of assessment you receive after filing your taxes. adjustment. Ken earned ,000 in 2013 and has no pension adjustment. His maximum contribution for 2014 is (50,000 x . 18) + 32,000 = ,000. Clara earned ,000 in 2013 and has no pension adjustment. Karen earned ,000 in 2013 and has a pension adjustment of ,832. Her maximum contribution for 2014 is (140,000 x . 18) = 25,200 which is greater than 24,270. So, she can contribute ,438: rrsps are most beneficial to people who are in the higher tax brackets and expect to be in a lower tax bracket when the funds will be withdrawn.