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Registered Retirement Savings Plan Deduction
(redirected from RRSP Deduction)

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Registered Retirement Savings Plan Deduction
A tax deduction one takes from contribution to a Registered Retirement Savings Plan. An RRSP is an account into which a worker makes contributions up to a certain limit throughout his/her working life, and from which he/she begins to take distributions following retirement. The contributions one makes are taken out of one's taxable income. The trade-off for an RRSP deduction is the fact that distributions are taxable. The RRSP deduction can reduce one's tax liability in the years contributions are made, but it is especially important because the taxation on distributions almost certainly results in lower tax liabilities after retirement.


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In such a case, the distribution included in income will be offset by an RRSP deduction.
Investors not only see their money grow locally, they are also eligible for a 35 per cent tax credit and RRSP deduction.
Table 2: RRSP Contributions 1985-1999 ($millions) RRSP Deductions Total As Percent RRSP Year Income Amount of Income Limits (a) 1985 307,552 6,672 2.
 
 
 
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