Joe aged 24, and Kate, aged 24, met in college. While studying, Joe worked part-time selling car parts

 

to autobody shops in the GTA. He earned $12,000 a year, for two years. After graduating from his

program, Joe landed a job selling cars for Chrysler. Joes started his new job on January 1, 2023, and his

annual salary is $80,000 a year. Kate on the other hand, only worked part-time during the summer

months of her program. In 2020, she earned $20,000 working for the CNE. In 2021 and 2022, she

earned $8,000 a year working at Casino Niagara part-time. Recently, Kate landed a full-time position at

the casino. Her annual salary is $65,000 a year. Kate's employer has a defined contribution pension

plan it offers its employees. The company matches employee contributions, dollar-for-dollar, to a

maximum of 6% of salary. Joe's employer does not offer pension benefits. Assume that Joe's average

tax rate is 25% and Kate's average tax rate is 22%.

Answer the following questions as of February 1, 2023.

1. If Joe continues to work for his employer, and his salary remains the same, what will be his total

RRSP contribution room? Assume he has never made a contribution. (3 marks)

2. If Kate continues to work for her employer, and her salary remains the same, what will be her

total RRSP contribution room? Assume she has never made a contribution. (3 marks)

3. If Kate joins her employers pension plan, and maximizes the contributions, what will be her

outstanding contribution room? (3 marks)

4. If Joe makes the maximum contribution to his RRSP, will he receive a tax refund? If yes, how

much? (2 marks)

5. On February 10th, Joe and Kate decided to get married. If they get married on September 1,

2022, and Kathy makes a $1,000 spousal RRSP contribution, who would receive the tax

deduction? How much will they receive? (2 marks)

6. Who would have to report the funds as income, if Joe withdraws them on September 2nd, 2023?

(1 mark)