Question
John does not understand how a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA) and a work. Respond with either Yes or
John does not understand how a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA) and a work. Respond with either Yes or No in each box below.
Question | RRSP | TFSA |
Age limit to contributing |
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Age requirement to start contributing |
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Need earned income to contribute |
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Contributions are tax deductible |
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Withdrawals are taxable |
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Report contributions on your tax return |
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Report withdrawals on your tax return |
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Report your annual investment earnings (interest, dividends, capital gains) on your tax returns |
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Interest on a loan is tax deductible |
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If overcontribute by over $2,000, there is a penalty of 1% per month to pay above this amount |
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No grace amount of $2,000; any amounts over the limit are subject to the penalty of 1% per month based on the highest excess for the month |
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Requirement to convert to a Registered Retirement Income Fund (RRIF) or an annuity at a later date |
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