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Anjum Abdul is a personal tax client of Palmer Stedman LLP (PSL). Victor Carlson works for PSL, and Ross Palmer, senior partner of the firm,
Anjum Abdul is a personal tax client of Palmer Stedman LLP (PSL). Victor Carlson works for PSL, and Ross Palmer, senior partner of the firm, has asked Victor to determine the maximum registered retirement savings plan (RRSP) deduction Anjum may claim in determining his 2021 net income for tax purposes. The following document is attached: Appendix: Information Anjum provided on his income and pension plans Appendix: Information Anjum provided on his income and pension plans In 2020, my salary net of my $3,400 contribution to my employer's registered pension plan was $82,000. I own a rental property and earned net rental income of $2,600 during 2020. I have an investment in Balco Inc. shares. I received eligible dividends of $2,000 on those shares during 2020. I am a member of my employer's defined contribution pension plan. During 2020, in addition to the contribution I made, as noted above, my employer made a contribution on my behalf of $3,600. I contributed the following to my RRSP: $ 5,400 February 26, 2021 December 31, 2021 March 3, 2022 11,800 1,800 Task 1 Using the information provided in the Appendix, determine Anjum's 2020 earned income. Instructions: In Column B, enter "0" if the amount is not included as an element of earned income. If the amount should be added to earned income, enter that amount as a positive. If the amount should be deducted in determining earned income, enter that amount as a negative. No dollar signs, decimals, or commas should be entered. A B 1 Information item Earned income 2 Salary 3 Net rental income 4 Dividends 5 Earned income 0 Task 2 Assume Anjum has provided further information and his 2020 earned income has been correctly determined to be $89,000. Using that and the information provided in the Appendix, determine Anjum's deduction limit for 2021. Instructions: In Column B, if the amount should be added to the deduction limit, enter that amount as a positive. If the amount should be deducted from the deduction limit, enter that amount as a negative. No dollar signs, decimals, or commas should be entered. A B 1 Information item Deduction limit 4,500 2 Deduction room carryforward from previous year 3 Impact of 2020 earned income 4 Pension adjustment 5 Deduction limit 4,500 Task 3 Using the information in the Appendix, determine Anjum's contributions available for deduction for 2021. Instructions: In Column B, select the appropriate reason for including or not including the amount as a contribution available for deduction in 2021 from the drop-down In Column C, enter "0" if the amount is not an available contribution. If the amount is an available contribution, enter the amount as a positive. No dollar signs, decimals, or commas should be entered. A B Contribution available 1 Contribution Explanation 2 Undeducted contribution carryforward 1,300 from 2020 3 February 26, 2021 4 December 31, 2021 5 March 3, 2022 6 Contributions available 1,300 Column B drop-down options Contribution made in the last 10 months of 2021 Contribution made in the first 60 days of 2021 and therefore included in 2020 tax return, and undeducted contributions carried forward Contribution made more than 60 days after the end of 2021 Contribution made in the first 60 days of 2022 Assume further information has become available and Anjum's deduction room available has been correctly calculated as $13,720. Contributions available for deduction have been determined as $13,250. Determine the maximum RRSP deduction Anjum may claim in determining his 2021 net income for tax purposes. Instructions: In Column B, enter the maximum RRSP deduction as a positive. No dollar signs, decimals, or commas should be entered. A B 1 Amount 2 Maximum RRSP deduction for 2021
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