CFP Exam (Canada) Practice Questions - CFP Examination (FP Canada) Exam

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A Canadian client earns $90,000 and contributes $6,000 to their RRSP. Ignoring other deductions, how does the RRSP contribution affect taxable income for the year?

It is a non-refundable tax credit worth 15% of the contribution It reduces taxable income to $84,000 as a deduction It has no effect until the funds are withdrawn It increases the client's net income by the grossed-up amount

Correct Answer:

It reduces taxable income to $84,000 as a deduction

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