Fred Tran is looking for some advice on his retirement savings and has provided the following...

 

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Fred Tran is looking for some advice on his retirement savings and has provided the following information regarding his income: 2019 2020 Employment income Less: Registered Pension Plan contribution Net employment income $85,000 (8,500) 76,500 $ 96,000 (9,600) 86.400 Grossed-up dividends Interest 6,000 1,000 9,000 2,000 10,000 21,000 Net rental income (loss) Total property income (2,000) 5,000 Taxable capital gains 6,000 4.500 $87,500 $111,900 Pension adjustment $ 9,350 $ 10,950 Fred's unused Registered Retirement Savings Plan (RRSP) deduction room at the end of 2019 was $2,000. Fred would like to know if there are any other tax-deferred ways to save for retirement other than RRSPS. Fred has heard of Tax-Free Savings Accounts (TFSAS) but doesn't know much about them. Required: a) Calculate the maximum RRSP deduction available to Fred for 2020. (4.5 marks) b) Address Fred's question regarding TFSAS by providing four comparisons to RRSPS. (2 marks) Fred Tran is looking for some advice on his retirement savings and has provided the following information regarding his income: 2019 2020 Employment income Less: Registered Pension Plan contribution Net employment income $85,000 (8,500) 76,500 $ 96,000 (9,600) 86.400 Grossed-up dividends Interest 6,000 1,000 9,000 2,000 10,000 21,000 Net rental income (loss) Total property income (2,000) 5,000 Taxable capital gains 6,000 4.500 $87,500 $111,900 Pension adjustment $ 9,350 $ 10,950 Fred's unused Registered Retirement Savings Plan (RRSP) deduction room at the end of 2019 was $2,000. Fred would like to know if there are any other tax-deferred ways to save for retirement other than RRSPS. Fred has heard of Tax-Free Savings Accounts (TFSAS) but doesn't know much about them. Required: a) Calculate the maximum RRSP deduction available to Fred for 2020. (4.5 marks) b) Address Fred's question regarding TFSAS by providing four comparisons to RRSPS. (2 marks)

Answer rating: 100% (QA)

ANSWER 1 TAXABLE INCOME IN 2020 111900 For the year 2020 RRSP Deduction limit is 18 of pre tax earni... View the full answer