Friday, July 22, 2016

RRSP withdrawals and withholding tax

11:13 AM


Question:

My tax advisor suggested withdrawing income funds from my RRSP account before my non RRSP account now during times of layoffs.

This would be to reduce possible clawbacks in OAS at a later time. Is there a way for the software to pull from RRSP before non RRSP?

Also can it incorporate the withholding taxes that would be applied to withdrawal of the RRSP?

Answer:

In order to do this, check the option 'Already Retired' on the Financial Information page.

Then on the Options page, on the first tab under 'Registered' select 'At the selected retirement age' for the 'Start Withdrawals of Registered Investments' option.

The income taxes showing in the cash flow statements are income taxes and deductions for each year based on your mix of income from all sources.

For withholding information, please visit the CRA website, or see this link:

http://www.taxtips.ca/rrsp/withholdingtax.htm

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