Spousal RRSP?

[tasamy]

Can you please tell me how can I use the Spousal RRSP for maximum tax reduction?

I get 100k and my wife is 20k. I am not afraid about separation! :D

Can I contribute 20k for my account and 20k for her account? :confused:

[AllWheelDrift]

Can you please tell me how can I use the Spousal RRSP for maximum tax reduction?

I get 100k and my wife is 20k. I am not afraid about separation! :D

Can I contribute 20k for my account and 20k for her account? :confused:
Spousal RRSP is really only useful for income splitting at retirement.

You can't contribute to her RRSP account from your RRSP account, what you can do is make RRSP contributions to her account, but contributions count towards your RRSP limit.

The benefit is when she takes money out of her spousal RRSP account it's taxed as income for her, but ONLY if you haven't contributed to her spousal account in the past 3 years, so you can't use it for short term income splitting.

I.e. Instead of contibuting 20k to your RRSP this year, you can contribute 20k to your wife's spousal RRSP. It will use your contribution room, and you'll get the same tax deduction as if you'd contributed to your RRSP. Then, if for the next 3 years you don't contribute anything to your wife's spousal RRSP, after the 3 years she can take it out and be taxed at her marginal tax rate instead of your's.