If I received a severance package, that was put in a RRSP. Why do I to pay taxes on that amount, then pay taxes again when I use it?
Received the severance in February of 2017. Put all of the severance in an RRSP, and claimed that in 2016. In 2016 there was no box 67. I took the deduction. Now they have said I have to claim it as income and owe then a lot of money. I want to know if they are right, and why am I going to be taxed twice. Why put anything in to an RRSP.
If I received a severance package, that was put in a RRSP. Why do I to pay taxes on that amount, then pay taxes again when I use it?
If you haven't paid taxes on the severance amount, you won't be getting taxed twice. RRSP is a tax deferral vehicle, not tax mitigation. By putting money into your RRSP in 2016, you lowered the amount of taxes owed in 2016. Where the money came from is irrelevant. The issue of paying taxes on your severance is a completely separate issue. Simply putting that money into an RRSP doesn't make it tax free. You still have to pay taxes on it, then your income will be reduced by that amount when filing.
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.
Sign In
Canada (English)
EN
