Jake invested $800 in an RRSP.If he is in the 30 percent marginal tax bracket,he will
A)pay $800 less in taxes.
B)pay $240 less in taxes.
C)receive an $800 tax credit.
D)receive a $400 tax deduction.

Question

Quizplus · Accepted Answer

When Jake invests $800 in an RRSP, he can claim this contribution as a deduction on his income tax return. Since Jake is in the 30% marginal tax bracket, he will save 30% of his RRSP contribution in taxes. Therefore, Jake will pay $240 less in taxes ($800 x 30%).

Jake Invested $800 in an RRSP