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Mike (age 40) and Mabel Williams (age 45) have been contributing to their respective RRSP's for many years. Mike's employment income is $40,000/yr. Every year,

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Mike (age 40) and Mabel Williams (age 45) have been contributing to their respective RRSP's for many years. Mike's employment income is $40,000/yr. Every year, he contributes 3% of his salary into his employer's Defined Contribution Pension Plan, which is matched by his employer. His unused RRSP contribution room is $22,000 and this year's PSPA is $700. Mabel is an engineer earning $160,000/yr. Mabel also receives royalty income of $1,000/yr, for a children's book she published in 2014. She is a member of her employer's non-contributory DB pension plan into which her firm contributes 4% of her annual salary. Her unused RRSP contribution room is $8,000 and she will have a PSPA this year for $900. Her annual DB pension benefit accrual/entitlement equals 1% of her salary. Mike and Mabel also own a rental property (jointly) worth $180,000 that generates annual net income of $12,000, for which they each claim 50% for income tax purposes. 2) Explain the consequences if Mike over-contributes $1,900 to his RRSP? *Be specific - 2 marks Mike (age 40) and Mabel Williams (age 45) have been contributing to their respective RRSP's for many years. Mike's employment income is $40,000/yr. Every year, he contributes 3% of his salary into his employer's Defined Contribution Pension Plan, which is matched by his employer. His unused RRSP contribution room is $22,000 and this year's PSPA is $700. Mabel is an engineer earning $160,000/yr. Mabel also receives royalty income of $1,000/yr, for a children's book she published in 2014. She is a member of her employer's non-contributory DB pension plan into which her firm contributes 4% of her annual salary. Her unused RRSP contribution room is $8,000 and she will have a PSPA this year for $900. Her annual DB pension benefit accrual/entitlement equals 1% of her salary. Mike and Mabel also own a rental property (jointly) worth $180,000 that generates annual net income of $12,000, for which they each claim 50% for income tax purposes. 2) Explain the consequences if Mike over-contributes $1,900 to his RRSP? *Be specific - 2 marks

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