CONTRIBUTING TO an RRSP under the new rules can be as simple for you as 0-1-2. Your earned income in 1990 {0) determines how much you may contribute and deduct for the tax year 1991 (1). And your deadline is Feb. 29, 1992 (2). Revenue Canada should have sent you late last year a notice showing your contribution limit. But check that figure, as some of those statements were incorrect. ~The rule: Your 1991 deduction limit is $11,500 or 18% of your 1990 earned income — whichever is less. If you belonged to a registered pension or deferred profit-sharing plan, you must then subtract your pension adjustment (PA) for 1990 (which should have been on your. 1990 T4 or T4A stip) and any net past service pension adjustment (PSPA) for 1991. Contact your payroll or personnel department for more information on PAs and PSPAs. Note that special rules apply if you are involved in. a family business pension plan. And also review the following key features of pension and RRSP reform: @ The $8,000 over-contribution. You may contribute up to $8,000 more than your RRSP limit. (This is an ongoing, not an annual, limit.) Any amount above the limit attracts a penalty of 1% a month. You may not deduct the over- contribution, but this money can grow tax-free in the RRSP. How- ever, unless you use the over- contribution in a future year, you will be taxed again on this money ‘when it is withdrawn. @ The carry-forward rule. If you don’t make your max- ’ contributions Michaei Grenby DOLLARS AND SENSE imum contribution, you may carry forward the unused ‘‘contribution room’? up to (in most cases) seven years. That could make sense, for example, if you were in the lowest tax bracket last year but will be in a higher tax bracket this year. Just make sure you will have the money to make the catchup in future decide to spend now and save later. And always check the cost of postponing both the current tax deduction and the tax-free growth until you do make the contribu- tion. (However, you may con- tribute now and carry forward claiming the deduction.) @ The $6,000 spousal pension rollover. If you have regular income from a registered pension plan (note that CPP,-OAS, RRIF and an annuity don’t qualify) or deferred profit-sharing plan,. you may transfer up to $6,000 a year to your spouse’s RRSP (provided your spnuse is 71 or younger). This special contribu- TRIMARK MUTUAL FUNDS RRSPs “How do they 310,000 investment $37,527 to do it?” ATRIMARK MUTUAL FUNDS WE MANAGE. To OvurtperFrorm. _if. you: BUSINESS Key guidelines for 1992 RRSP contributions’ tion/deduction is in addition to the preceding limits. This spousal rollover is based on your 1991 pension/DPSP in- come and, as long as you con- tribute by Feb. 29, will reduce your 1991 taxable income. You may use any funds to make this contribution but the