Income Tax Question

[epiceric]

Hi, my gross income for year 2011 was roughly $86000 and the income tax was $16000. I have $70000 federal, $70000 provincial unused tuition tax credits. Can anybody advise how much I should put in RRSP this year to avoid paying tax to gov' or maximize tax returns? Thanks

[marstec]

I would use the tuition credits to reduce your taxable income. Stick the tax refund into a tax-free savings account.

[epiceric]

I am definitely gonna use all of the tuition credits to reduce my income. As per my gross income, I should have paid $22300 for the tax. The problem is that the income tax I paid for 2011 was only $16000 (I had 3 employers, and one of them (part-time) did not deduct income tax). So even I use all of unused tuition credits, I think I may owe money to government.

[Carlotta]

I would spend $20 on Turbo tax and just plug in thenumbers. It will tell you the optimal amount of RRSP contribution you need to make to reduce your tax owing to zero.

[Ciel]

I would do what Carlotta suggested, as you did not indicate your province (each one has its own tax rate and surtaxes and credits).

FYI-your federal taxes payable are $16,128.40 so that takes the deducted tax money right away. You know for sure that your provincial taxes payable are $6300? CRA tax table for 2011:

http://www.cra-arc.gc.ca/tx/ndvdls/fq/2011_rt-eng.html


Make sure you don't overlook security deposit box rental for investment papers if you had one (another income deduction). Non-refundable tax credits-is there any missed charitable donation, medical expense claim, public transit monthly or weekly pass claim or dependant claim?