Q&A with a Certified (CPA) Accountant | Filing Income Taxes in Canada, TFSA/RRSP/Cash, Top TIPS etc.
ฝัง
- เผยแพร่เมื่อ 9 ก.ค. 2024
- 00:00 Introductions
01:44 Declaring Income/Filing Taxes
05:51 Biggest Mistakes - Students, Connecting your CRA Profile
08:45 Biggest Mistakes - Self Employed
09:55 Various Tips
12:10 Audits
16:09 Using Software (Turbo Tax etc.)
18:04 RRSP Benefits (Powerful Tool!)
23:48 RRSP to Offset Capital Gains - with a little confusion :)
26:54 RRSP when Self-Employed
28:26 TIP if Self-Employed
29:30 RRSP Meltdown Strategy
31:35 TFSA - A Gift
34:08 Non-Registered (Cash/Margin) Account
36:15 50k in TAX Free Eligible Dividends with 0 Income?
38:15 U.S. Stocks - Foreign Tax Credit
42:06 Statements for filing Taxes (T5/T3)
42:55 U.S. Stock Income
45:44 Need an Accountant?
48:53 OUTRO
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Need an Accountant?:
Jason Georges - CPA
email: impotgeorges@gmail.com
Price will vary according to Situation
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A good general presentation however, a word of caution. Some of the answers may not be applicable depending on your jurisdiction and personal investment situation. For example, as the accountant is Quebec based where the minimim eligible dividend tax rate for 2022 is 4.53%, he wasn't aware that in Ontario, the minimum eligible dividend tax rate is negative 6.86% to $46,226 and negative 1.2% up to $50,197. The RRSP meltdown answer to take the minimum payment at age 71 may be correct for a small RRIF, yet could have disastorous estate implications for a large RRIF. Depending on your personal situaiton, it may be benefical to delay your CPP and OAS and aggressively draw your RIFF down at an earlier age. Short answer, always check your personal situation.
The point of the RRSP meltdown strategy is to live off RRSP income between 60 and 70 and delay CPP/OAS and thus increase the CPP/OAS payments after 70. There are many variations, but it is about increasing income while being as tax efficient as possible. A good financial planner can run the numbers, a bad one from a bank will tell you to keep everything invested with them in a mutual fund as long as possible so they earn more fees.
Good tip , thanks . In the end it really depends on the person and how much do they need to live . Rrsp might not be enough or they might not have enough in the rrsp
@@PassiveIncomeInvesting Absolutely. People need to have a plan tailored to their situation. There is no one-size-fits-all solution to maximize income and minimize taxes.
I had those bad bank mutual funds. Doing so much better DIY with ETF’s, stocks and REITs
Just wanted to say that YES if all you have is eligible dividend income....you will pay 0% tax on the first $52000 of income per year (at least in Ontario)...you do still have to pay $600 Provincial Health Premium ...so bottom line if your only income was $52000 in actual eligible dividends you pay $600 for the Health Premium and you net $51400....In Quebec you would pay about $1500 on the $52000...That's the journey i'm on...getting closer everyday and why i love dividend income/investing :)
Thanks for confirming !. In the end your tax bracket matter a lot to my alot less taxes . Capital gains are also very tax efficient in low tax brackets
Unless I have read it wrong, as I understand it, the following amounts of eligible Canadian dividends are tax free assuming no other income (for 2021):
British Columbia - 53,810
Quebec - 40,301
Alberta - 53,810
New Brunswick - 53,810
Saskatchewan - 53,810
Nova Scotia - 32,410
Manitoba - 26,411
Prince Edward Island - 48,671
Ontario - 53,810
Nfld. & Labrador - 18,694
Looks about right but it’s hard to NOT have any income whatsoever lol
Thank you both for this!
Super Video! Great job!
LOVE THIS
Thank you Adrian for another great video.
So excited for this video! Thank you Adrian and Erica!
Thanks Adrian, very helpful.
Thank you for this valuable info right before tax season!
Thanks for the information.
Really informative !😀
Thank you very much.
Another much appreciated video. Being self employed I rather enjoyed the tips, what a potential audit could look like; that I feared would be extremely time consuming and Jason referencing the Rock Bottom. Hope the CRA never lays the smack down on me.
Good interview , one very important area on T1135 are missing. When you own US Stock in non-registered acc , with value over 100K CAD, you might need to do extra work on T1135 reporting
So a capital gain is not activated until there is an initiated sell for the relevant tax year in a non-reg account correct? As well are dividends also not activated until an etf is sold in a non-reg as well? I’ve been investing in VFV in my non-ref as my tfsa and rrsp accounts are finally topped up. Thanks.
thanks Adrian for very nice video
Thanks for this presentation at the tax time. I have a question according to the distributions received from US securities in a non-registered, these distributions including ROC, what is the accepted documents from the CRA to calculate the adjustment cost base, as the standard investment cost received from the brokers, included only the initial book cost.
What is roc ? Do not need report income tax?
Thanks
This is the most east end conversation I've ever heard. I need a good accountant lol
How do I claim ETF loan interest? It is supposed to be tax deductible?
Funny this afternoon crossed my mind whether or not you did your own taxes. Well question answered. 😂
The CRA reported my TFSA contributions limit wrong for my wife and for 2022.
I used the base amount of 6000 plus the amount we took out to live on. Has anyone else seen this happening?
Happened to me last year, but it self-corrected after 5-6 weeks.
The bad quality of the sound cuts in half the quality of this conversation!
Sorry about that ☹️
Tax implications for dual citizens could be a question to ask in the future.
Very interesting video. I would like to suggest, if possible, to have an expert explain how to manage a RRSP after 70 years old! At 71 you have to withdraw 5,28%, then 5,40% and so on each year. What should you keep in the RRSP to be certain not to run out of money...The withdraw problem is more complicated than the accumulation problem, if someone don't have a PhD in finance!
High yield funds !
More analysis is required with respect to RSP meltdown and identifying the optimal timing for taking CPP / OAS. RSP meltdown can be an optimal tool to delay CPP and/or OAS to age 70. Taxes are relevant for sure but getting a higher, guaranteed, inflation indexed CPP payment can really take the pressure off later in life, especially if you invest in income options where dividend hikes are less common.
Great video, thank you. I have many US investments in my TFSA, the 15% withholding tax to the IRS, will I be able to accumulate foreign income tax credits?
Not in the tfsa
If your only income is $63040 dividends 2021, no regular federal tax. $1385 amt payable
What Canadian stocks do you recommend I hold in my rrsp
Better to hold US stocks and other foreign stocks in RRSP (Canada has tax treaty with other countries and US that's tax advantageous and the returns are larger than Canadian stocks). You should buy Canadian stocks in your TFSA (especially the Canadian banks that pay a good dividend)
Did we figure out if $50k dividend is tax free if we have no other income?
In Ontario , yes b only if you’re in the first tax bracket . So you need to have no other income whatsoever
Hi! Can you guys redo this video in french for Canadian Quebec people?
Thanks for the video!
Question:
❓So if now i am at a high tax bracket, can i make a large RRSP contribution (saving these money from high taxes), and then take a break from work the next year (having no income in that year) but withdrawing the money i previously contributed paying the lower bracket tax?
Yea but typically you take out rrsp money only later on in retirement
Importantly, unlike a TFSA, when you withdraw from your RRSP you do not gain back that contribution room. So if you max out your RRSP and then take it all out, you've effectively deleted your RRSP's until you earn more contribution room.
Great video Adrian, if my RRSP generates 13 000 a year in yield, would I be able to draw that tax free if I retired early and that was my only source of income since the yield on the TFSA doesn't get taxed anyway
Hey bud , everything you withdraw of your rrsp is taxable to your marginal tax rate
@@David.Bergeron awesome just the answer I've been searching for, now just to be death pledge I mean mortgage free
Adrian, are rrsp limits accumulative?
Yes of course you never lose any unused room
For someone investing in a margin (non-registered) account for the first time. What records should be kept for taxation purposes? Are the T5 and T3s you receive from your broker sufficient? ( Or should you track your income based on the type of income that makes up the distributions etc.? ) what and how?
I have the same question except for a personal line of credit!
always track your own investments, brokers can and do make mistakes and the CRA will penalize you for the mistake.
I have been relying on the T5/T3 forms since I started my own investing back in 2008 & have had zero issues. I expect that the Government relies on these forms to determine the amount of dividends, capital gains, etc I have received for each stock/fund the same as I do. I very much doubt the Government would try any other way to calculate those distribution amounts. I have only spot checked a few of them over the years & each time they were accurate as far as I could tell, so have not spent the time to validate every one of them every year.
@@kevinhallman4286 thanks - I only invest inside my registered accounts, but I'm helping my son with a new margin account.
T3 and t5 as well for the income and if you triggered capital gains you need another statement , I forgot it’s name ts5008 something thing like that
Excellent video once again. Please could your accountant answer a question that I have been researching but unable to get clarification for Quebec residents. In Quebec we cannot designate a successor on our TFSAs. Apparent,y this would be referred to our Quebec Wills. In the event of the death of my spouse in Quebec would my spouse’s TFSA and contribution room be made available to me tax free? We are beneficiaries of each other in our Quebec wills. Greatly appreciated if you could help with this.
Hmmm… have you tried asking the bank you have your tfsa with ?
Yes I spoke to a lawyer at TD and my lawyer. I will try CRA after income tax period is over.
Wow and they did not give you an answer ?
No only that it is the law in Quebec. Could not answer about contribution room. I was hoping an investment accountant in Quebec could help. I will keep you posted after I contact CRA.
regarding how much you should take from your RRSP once you convert it over to a RIF. Many financial institutions will tell you to melt down your RIF and take your CPP later. Your CPP will increase the further out you wait. Also keep in mind that any RRSP/RIF remaining upon death moves tax free to your spouse assuming you have a spouse. Upon death of your Spouse any remaining RIF is taxed at the marginal tax rate the year they die. Sadly another money grab from the Gov't. Its very easy to fall into a 50% tax bracket when you die. This unfortunately means that 50% of the remaining RIF funds get paid to revenue Canada....this is another reason to melt down your RIF to limit the high tax bill upon death of both parents.
Calling it a tax grab after getting years and years of tax refunds for contributing to the RSP is off base. It’s true, the tax at death of the surviving spouse is extremely high, but it can’t be evaluated without consideration of all the tax saved from the decades of contributions.
When you buy and sell ETFs, does Wealthsimple track your capital gains and losses for income tax purposes?
TD & RBC direct investing would do the same right?
I once had a broker report all my sales without the buy price and CRA wanted a massive amount for capital gains until I could show that I really small profit.
The #@!!!* brokerage had been churning my money for commissions!
I have handled my own investments since then.
Yes of course !
What is better to invest in? A TSFA or a RRSP? I'm a new passive investor.
Love your channel and look forward to your uploads
Both ! 🤑
Ok thank you sir. Much love
It really depends on the likelihood of you having a lower marginal tax rate once you retire. If you will, RSP is almost always the better choice. Remember, to contribute $6,000 to your TFSA you have to earn $8,571 in a 30% marginal tax rate. So, you could contribute $8,571 to your RSP or $6,000 to your TFSA each year. Of course, this approach requires the discipline of not spending your refund (or contributing via a payroll deduction plan) and if you cannot commit to that then pay your tax and contribute to your TFSA. Any money leftover after that could then go to your RSP.
@@David.Bergeron I agree the answer is usually TFSA, but if you know you will not need the money until retirement then RRSP *might* be the better choice. Primarily, if you can ascertain that the likelihood of being in a lower tax bracket in retirement is high, then there is a good argument for choosing RSP. High earners who are hitting the 43% marginal bracket today (and are not participating in a defined benefit pension plan) are unlikely to hit that in retirement. One has to acknowledge that investing in RSP is done with pre-tax money. Still, the TFSA has far more flexibility, offering an opportunity for short term, medium term, and long terms savings goals, and for that reason the TFSA usually wins out.
Please send your buddy a proper microphone!
lol yea he’s not a TH-camr
The best part of the video, "the government is not here to take your money, they're here to take what's theirs." 😂 As I watch 30%+ of my income get taken away for all the hours i've worked on the front lines in healthcare through this pandemic. Nothing is theirs, we all earn every cent of our income. It's criminal just how much the government takes. Only going to get worse!
This is why you want to maximize your TFSA with stocks that pay nice dividends. So you can get to the point where you have a decent tax free income source.
@@techiem4k2c7 My TFSA is maxed and im yielding over 10% with CC etfs and Split corps. Doesn’t take away from the fact im 25 with many years of work ahesd and the government is taking +30% of my income.