QUESTION: Hi David, I have recently moved in with my boyfriend and we are preparing for marriage next year. Since we recently had our financial plan drawn up by my investment advisor, I found out that my boyfriend doesn't file taxes! I told him he has to from now on so that we can optimize our return when we are common law and eventually married. He has been contributing to RRSPs since 1998 and has never used the tax benefit! To further complicate matters, he had to borrow $25,000 from his RRSPs in 2005 as a down payment on our house (and not as a first time home buyer, so he paid 10% tax already on the money). I've started preparing his 2003, 2004 and 2005 returns via tax preparation software online. Problem is he doesn't have an RRSP deduction amount because he hasn't filed. Already he is owed money each year without RRSP amounts, but in order to maxmimize the benefit I'm wondering how to break up these unused RRSP contributions best. Also, CRA tells us he can't be fined if he's never been asked to file, but we can't get an RRSP deduction limit until he has filed one return first. I started with 2003 as tax prep software goes back to that time making it easy (I am an idiot on paper tax returns), but should we hire an accountant to go back any further? Thanks, --------------------------------------------------- david ingram replies: He can file back to 1996 and should if he has refunds coming. You should use someone to do them for you. Easy for me to say but that IS what we do. Once a base is established, the RRSP deductions will fall into place. In a similar case, we just turned a $29,000 tax bill into a $5,000 refund. Remember, that the 10% paid on the $25,000 RRSP withdrawal is only a token. The minimum tax he will pay is 24% and he will likely be paying 35% on the $25,000 withdrawn. That means another $4,000 to $6,000 of tax on the RRSP alone. Good luck! david David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists Home office at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 10 PM 7 days a week (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://www.david-ingram.com/> Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. 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