I withdrew $7500 from my RSP in 2014. They held back 20% tax at that time ($1500). When i plug the numbers into turbo tax it takes an additional $1500 off of my tax return. If I assume that withdrawl is added to the top portion of my income then I should be paying 26% tax on it. By my math I should be paying an additional $450 not $1500. Can someone shed some light?
26% is just federal tax. If you are in ON you will have an extra amount for provincial tax and surtax . This brings you to the extra tax amount.
Thanks. I didn't realize just how deep the man had his hand in my pocket (39.41% of the way down). Ouch.
Yes I'm afraid so, ON surtax and health premium are bummers. I got burned selfsame way with a $5k RRSP withdrawal 2 years ago....won't do that again before RIFing.
And because it was only $5k I had only paid 10% upfront tax....