Case One Marsha Had Total Income of $112,000 and Earned Income of Income

question 6

Essay

Case One
Marsha had total income of $112,000 and earned income of $75,000 in 20x9. Her 20x8 Notice of Assessment showed unused RRSP contribution room of $12,000. She and her employer each contributed $2,500 to her RPP in 20x8. Marsha anticipates a pension adjustment of $5,500 in 20x9.
Required:
Calculate the maximum RRSP deduction that Marsha can make for the 20x9 taxation year. (Assume 20x9 is 2019.)
Case Two (Independent of Case One)
Marsha is 35 years old. She is considering investing $2,000 per year in a savings account at 8%, or $2,000 in an RRSP at 8%. The money will be invested for the next 30 years and will not be withdrawn until Marsha retires.
Required:
A. Calculate the valuation of each option, net of taxes, if Marsha withdraws all of the money when she turns 65? Assume that her tax rate will be 35% every year until she retires.
B. How much could Marsha contribute to her RRSP each year if $2,000 is the net cost of her investment after the tax savings from her contribution?

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Definitions:

Sleep Patterns

The cyclical rhythms of sleep and waking, typically following a daily schedule and influenced by factors such as age, lifestyle, and health conditions.

Alert Inactivity

A state of being vigilant and ready to react despite not being actively engaged in tasks.

Quiet Sleep

A stage of sleep characterized by the absence of motor activity and vocalization; it is often considered restorative and peaceful.

Active Sleep

A phase of sleep characterized by rapid eye movements, more brain activity, and dreams, also known as REM (rapid eye movement) sleep.