# I made the biggest tax screw up of my life!



## Imessedup (Oct 12, 2016)

I made the biggest screw up of my life!!! I've been crying for an hour now and I never cry.


We were trying to withdraw from my RRSP for the Home Buyers plan for our first house.
So I just noticed that the funds are in my Wife's name.

I started to cry(I'm 28 years old and I've been saving this money since I've been 16) as I just realized the screw up I've done in March and how this is going to be a complete Train Wreck.


**What I wanted to happen:** My wife earns more than me so I wanted her to use up all her RRSP room and give me a spousal RRSP. So she can take the tax break. (she had $19,000 in RRSP room)


**What really happened as I am a complete idiot:** I made the account and gave her the Spousal RRSP and I'm apparently taking the tax break, (I only have $3,000 contribution room). 


I realized this once I tried taking out $25,000 for our HBP and the woman asked me why my wife's signature wasn't on the form.... then I realized I gave her the spousal RRSP.


SOOO Right now, I have absolutely no idea what to do. The funds are stuck in a GIC until March 2017. I don't know how to fix this, this is such a great start to trying to get our life together and buying a house, now we can't even reach our down payment.

The bank (People's Trust) will not change the information even though CRA said they easily can.



I don't know if I should get my wife to withdraw $19,000 under the home buyer's plan or if that is just going to mess things up even more?

Please someone help me, I'm having such a panic attack!


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## mordko (Jan 23, 2016)

Here is what I would do if I were in your position:

1. Stop panicking. How is that going to help?

2. Don't blame yourself. Not your fault. It's confusing, an easy mistake to make. The bureaucracy which invented this whole thing is to blame. 

3. Write to People's Trust and explain what happened. They are at least partly to blame; either information wasn't clear or they didn't spot your mistake. They may have even mislead you by assuming that it was the guy who wants to put the money into his wife's SRRSP. Explain that CRA specifically stated that PT should make the change. They have absolutely no interest whatsoever in screwing you over this, except someone is to lazy to be bothered and make the change. 

Follow the letter with a call. Don't take "no" for an answer. Ask for the manager. 

It is my wild guess that you will succeed, so you will.


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## Imessedup (Oct 12, 2016)

mordko said:


> Here is what I would do if I were in your position:
> 
> 1. Stop panicking. How is that going to help?
> 
> ...


Thank you for the response!!!

You convinced me not to give up.. and at this point I found form T3012A.. have a look at that if you have a minute


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## twa2w (Mar 5, 2016)

So if I have this right, you actually made a contribution to a spousal plan for your wife for 19,000. Your actual contribution limit is only 3000 so you are over contributed by 16,000.
What you meant to do was have your wife make an rsp contribution to a spousal plan for you. So she would have a 19,000 deduction and you would have a spousal plan in your name of 19,000.
I assume you did this in 2016 after March 1St but more than 90 days ago.
You now have house purchase pending and need $ for HBP. 
When is your house deal closing?

Ok 2 options here. You and your spouse may approach peoples trust. Explain the error. They may reverse the paperwork and redo in the proper names using the original dates. If they do, you are good except this process may take some time and you would have to return any rsp tax receipts that were issued. It may also take some grovelling :-( 

The second option I see, is you can complete form t3012a, follow the process, get your money back. Have your spouse go in and contribute the funds to a spousal in your name. 
This can take some time as well. You may also have to pay a small penalty to CRA. 
Ensure the money goes into something cashable or liquid.
You would then have to wait for the 90 days to meet the qualifications under the HBP, then withdraw under the homebuyers plan. 
The 90 days may be a problem but check the rules. You may be able to borrow the funds to buy the house pending the money from the HBP but double check this.

Perhaps other posters have some better ideas.

Cheers
J


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## Imessedup (Oct 12, 2016)

twa2w said:


> So if I have this right, you actually made a contribution to a spousal plan for your wife for 19,000. Your actual contribution limit is only 3000 so you are over contributed by 16,000.
> What you meant to do was have your wife make an rsp contribution to a spousal plan for you. So she would have a 19,000 deduction and you would have a spousal plan in your name of 19,000.
> I assume you did this in 2016 after March 1St but more than 90 days ago.
> You now have house purchase pending and need $ for HBP.
> ...


Hi!

Nice to meet you and thanks for your time!

Option 1 didn't work for me.. even after talking to various supervisors and so forth, they also recommended the form T3012A and refuses to withdraw the funds from a GIC until I send the completed T3012A back to them. I'm being charged 1% of $16,000 per month since March.. which is A LOT of money  Hopefully CRA sends me back the T3012A before Dec 1st. I just sent the paperwork to St. John's NL today and included a letter stating my situation.

I believe that I can just withdraw the whole $19k as soon as I get the T3012A so I'm just going to put that directly towards my loan that I'm going to have to take for a down payment.

I really screwed this one up big time and I've decided to get an accountant for any future investment ideas, this is such a costly mistake and a huge headache, and its not something I really wanted to deal with before buying a house!


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## CalgaryPotato (Mar 7, 2015)

I'd raise a bigger stink. I don't see how this is your fault. You go in there and ask them to set up something for you and they do it backwards, and they say they won't do anything to fix it?


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## Imessedup (Oct 12, 2016)

CalgaryPotato said:


> I'd raise a bigger stink. I don't see how this is your fault. You go in there and ask them to set up something for you and they do it backwards, and they say they won't do anything to fix it?


I would go there if I could, but I'm in NB and the Branch is in BC :/

It is my fault, I couldn't comprehend their RRSP application: imgur.com/a/sZn8n


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## Imessedup (Oct 12, 2016)

Imessedup said:


> I would go there if I could, but I'm in NB and the Branch is in BC :/
> 
> It is my fault, I couldn't comprehend their RRSP application: imgur.com/a/sZn8n


So its going to take 11 weeks for me to get the paperwork back? So like 3 months @ 1% of $19,500.. geez by the time I'm done with this I'll be at $0


I faxed the local tax office begging them to process it sooner.


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