RRSP'S and Investment Income FAQ'S

Do you have questions about RRSP's and Investment Income as they relate to filing Income Tax?

Will I need to claim Interest on my income tax if I earned less than $50 in interest? 

No, most likely you will not receive a T5, because the Canada Revenue Agency (CRA) does not require financial institutions to issue a T5 for accounts where the total amount of interest earned for the year was less than $50. 

What is a T5?

The T5 is a statement of Investment income earned for the previous year. These amounts must be claimed when you file your taxes if the interest earned is over $50.

Am I able to deduct the investment or management fees charged by my bank on my income tax return?

Yes, you can claim them on the schedule where you claim your interest, dividends, carrying charges, if you earned Investment income on Non registered funds. If the investment income was earned on registered funds then you cannot deduct these fees.

If I have a business investment savings account, will I receive a T5.

No. T5s are not required for business accounts. Please consult your accountant for tax planning advice.

RRSP's FAQ's for Income Tax:

What are Non Registered and Registered funds?

Non registered funds are investments purchased outside of an RRSP or RSP. Income tax has been paid on non registered funds. Registered funds are investments held within an RRSP or RSP.  Income tax won't be paid on registered funds until you withdraw the funds from the plan.

If I've made a withdrawal from my RRSP under the  Home Buyer's plan or the Life Long Learning Plan, Will I receive a T4RSP receipt?

You will be issued a T4RSP receipt for any type of withdrawal from your RRSP or RSP plan.

Who receives the receipt for contributions to Spousal RRSP's?

The contributing spouse will receive the receipt to use as a deduction on their tax return.

Important Dates at Tax Time:

• Deadline for filing 2006 tax returns is April 30, 2007 for personal returns
• Deadline for filing 2006 sole proprietor and partnership small business returns is June 15/07
• RRSP Contributions which can be used for 2006 deductions-- deadline to purchase is March 1, 2007