My husband tax bracket range is 26% plus 10 % in AB = 36%
If he puts $10,000 in RRSP account (after minus this amount, his tax rate is still same), I believe he will get $3600 refund.
However the tax refund amount seems just $3200.
Does anyone know why not $3600? Please advise. Thank you.
Your thinking is correct as far as it goes. When your husband contributes the $10,000, this reduces his Net Income and Taxable Income by the same amount.
If his marginal rate on this amount is 36% , then he will have to pay $3600 LESS TAX.
But this does not mean his refund will be $3600.
His refund is the difference between the total tax he has paid in 2015 , MINUS his tax payable for 2015.
Let us say his tax payable is $25,400, but only $25,000 was paid during the year.
He will still owe $400 for 2015.
He then decides to contribute $10,000, so his tax payable is now 25,400-3600 =21,800
But he still paid 25000, so he is owed a refund of 25000-21800 =3200.
Your thinking is correct as far as it goes. When your husband contributes the $10,000, this reduces his Net Income and Taxable Income by the same amount.
If his marginal rate on this amount is 36% , then he will have to pay $3600 LESS TAX.
But this does not mean his refund will be $3600.
His refund is the difference between the total tax he has paid in 2015 , MINUS his tax payable for 2015.
Let us say his tax payable is $25,400, but only $25,000 was paid during the year.
He will still owe $400 for 2015.
He then decides to contribute $10,000, so his tax payable is now 25,400-3600 =21,800
But he still paid 25000, so he is owed a refund of 25000-21800 =3200.
good afternoon Stkbeech
Tony has the perfect answer. However. should you believe this calculation to be a software error, kindly contact customer support by clicking the following link to the Contact Us page. Complete the required information. A phone number will appear, along with your incident ID. Call the number. This will ensure that an appropriate agent is assigned to your query:
https://support.turbotax.intuit.ca/contact/
An escalation may be required in order for our software team to examine this more in depth
Thank you so much
Leeanne@TurboTax
I am having the same issue and dialed this number twice, 1-888-829-8608, first time I was told to call CRA and conveniently disconnected then called again and was again disconnected without being helped. My issue is with the software not CRA. I went onto facebook and chatted with Eric and was told Turbo Tax guarantees 100% accurate calculations but I can see an issue and just want to walk it through with someone and am not getting any help at all. I compared the entry and forms to 2014 and 2015 Turbo has an RRSP issue that is for sure. If anyone can shed some light here I would appreciate it. I may have to go and do the taxes manually because I need to be sure on the calculations.
I am so sorry awolfe1 , I have directed this issue to the appropriate department
Leeanne@TurboTax
awolfe1, specifically what is your issue? My initial response was to another asker with a specific question...and that question was answered from whatI can determine.
Kindly contact CRA as they create the calculations used in each tax form and will provide clarification:
1-800-959-8281