For people in the highest marginal tax bracket,which would save them the largest financial benefit?
A)A $10 000 RRSP contribution
B)A $10 000 RESP contribution.
C)A $10 000 TFSA contribution.
D)These would all be the same.

Question

Quizplus · Accepted Answer

For people in the highest marginal tax bracket, the RRSP contribution provides the largest financial benefit because it reduces the taxable income, which in turn reduces the tax liability. The amount of tax savings will depend on the individual's marginal tax rate. For example, if the marginal tax rate is 50%, then the $10,000 RRSP contribution would reduce the tax liability by $5,000. On the other hand, RESP and TFSA contributions do not provide any tax deductions, but they do offer tax-free growth on investment income. Therefore, the RRSP contribution would be the best choice for people in the highest marginal tax bracket.

For People in the Highest Marginal Tax Bracket,which Would Save