Jane Doe was seeking professional advice from you about her RRSP contributions. She has used all her deduction room, and neither did she have undeducted contributions by December 31, 2020. During 2021, she didn't contribute to her RRSP as she spent all her savings on a luxury yacht and named it John Doe. She would however be allowed to make the maximum contribution towards 2021 based on her 2020 Earned Income. For 2022, Jane would like to make the maximum contribution as she has recently won a lottery and she'd like to do so without penalty. Jane has given you the information below pertaining to the 2021 taxation year. Her employment income includes: 1) salary in the amount of $102,500; 2) RPP Contributions of $3,800. Note that her employer also contributed an equal amount to her RPP; 3) she had CPP and EI withheld at $3,166 and $890 correspondingly; 4) she received stock option benefit and interest-free loan benefit in the amount of $1,700 and $1,500 correspondingly; 5) her deductible employment expenses are $2,400; finally, she contributed to Red Cross in the amount of $1,800 through withholdings from her salary. On top of her employment income, Jane also keeps herself busy with a home-run business, from which she earned a net business income of $ 10,700. Her other income includes interest income of $3,980, foreign dividends of $9,875, and capital gains of $12,050. In addition, she received a royalty income of $ 3,100 from the children book she wrote. Though she has no children, she often dreams of becoming Mary Poppins someday. The last piece of information she provided was the spousal support she paid in total of $9,040. 

Requirement: Calculate Jane's maximum 2022 RRSP contribution (including the excess contribution without penalty). Hint: You need to calculate Jane's Net Employment Income and Earned Income first and show them as separate line items before calculating her RRSP contributions. Also, you must clearly show the details of each line item and related calculations.

Answer rating: 100% (QA)

To calculate Jane s maximum 2022 RRSP contribution we need to start by determining her Net Employment Income and Earned Income for the 2021 taxation y View the full answer