forgot to claim first 6o day RRSP deduction in 2009 on 2008 tax return - now what ?

[Rocky]

While i prepare to file my returns, I have just realized that the contributions that i made in the first 60 days of 2009, were never claimed on my 2008 return.

What is the best course of action under the given circumstances ? As this amount is ofcourse now a part of my 2009 income however was never claimed on a tax refund.

I am quite new to RRSP and file taxes myself using UFILE. so am not sure if this is a twisted issue, or would it be as simple as adding this amount to the over all RRSP deductions.

All suggestions are much appreciated

Thanks

 

[afransen]

You can carry RRSP deductions forward, even though you made the contribution in the past (this is not generally to your advantage unless you expect to be in a higher marginal tax bracket in the next few years). Alternately, you may be able to make an adjustment to your 2008 return and receive a refund now. Do whichever makes more sense. Either way you lent money to the government for free for a year.

 

[Tacoma]

I'm not sure if you can do a T1 adjustment request in UFILE but if you can't, you can download a T1-ADJ from the CRA website.

How you handle this depends on your taxable income and the amount of RRSP deduction. Generally, if your income and contributions are similar in both years and the deduction takes you into a lower tax bracket and most of the deduction is against income from the higher tax bracket, then you do the T1-ADJ.

You can easily work the scenarios out yourself using UFILE to see which is the better alternative.

 

[nfitz]

If you register at the CRA website, you can do a tax adjustment request in about 1-minute on-line. But there's a few week delay to register, as they have to mail you (snail mail you) a confirmation. Probably worth registering to be able to do in the future. Normally I find I make a mistake every 2 or 3 years. When I started looking at my 2009 RRSP deduction allowance I realised I had written in my 2008 deduction on the wrong line (line 207 instead of 208), and put it in as a pension deduction instead of an RRSP deduction, so my allowable amounts were wrong. It took about a minute to request the fix, and it came in the mail in 2-3 weeks.

To register, go to http://www.cra-arc.gc.ca/myaccount/

When the registration is complete you can go to "Change my return".

Or you can do it by paper and get a T1-ADJ and mail it in.

You have years to fix mistakes like this. Don't worry!

Another option is simply claiming it this year. I took parental leave for much of 2008 so my income was a lot lower; so most of my RRSP I put in that year I didn't claim and saved it for this year. If you look at Schedule 7 there's a place to report unclaimed deductions. Your contributions go on Line 2 and 3 (and are summed at line 9). On Line 10 you report how much you are actually claiming, so Line 14 is the amount you have decided (for whatever reason) not to claim. If you didn't file this in 2008 don't worry as long as your line 208 amounts make sense, they don't really worry about the Schedule 7 much. Though you could fix this on-line too if you want.