Personal Tax Strategy

Tax tip of the month

Are you planning to withdraw from your RRSP to meet cash flow needs?
Consider the implications of withdrawing funds from your RRSP

There could be significant tax-deferred growth lost by withdrawing money from your RRSP. However, if as a last resort you wish to take money from your RRSP, keep in mind that withdrawals from your RRSP are subject to withholding taxes. For Quebec residents, the combined provincial and federal withholding tax upon withdrawal for an amount under $5,000 is 21% and can reach a combined rate of 35% for an amount withdrawn that exceeds $15,000. Any difference between your marginal tax rate and the withholding tax rate will be payable at the time you file your tax return.