Capital Gains tax occurs when you sell capital property for more than you paid for it. In Canada, you are only taxed on 50% of your capital gain. For example, if you bought an investment for $25,000 and sold it for $75,000 you would have a capital gain of $50,000. You would then be taxed on 50% of the gain. In this instance, you would pay tax on $25,000. In Canada, there are some legitimate ways to avoid paying this tax: Tax shelters, Lifetime Capital Gains Exemption, Capital Losses, Deferring, and Charitable Giving.
The amount deposited into a Tax Free Savings Account (TFSA) is subject to a yearly contribution limit. For 2020, and again in 2021, the annual limit has been set at $6,000. As of 2021 the lifetime maximum contribution has grown to $75,500.
If an over-contribution is made Canada Revenue Agency will levy penalties.
Whether you should invest in a Tax Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP) is a question that affects almost every investor. For most, the answer is “a bit of both.”
If you have a looming short or medium-term need (under five years), the untaxed TFSA withdrawals are likely the right choice. For longer term retirement needs, you’ll want to invest in an RRSP.
With a new year comes new tax numbers! Below is a quick reference of important tax numbers for three years, including 2021. CRA has utilized a 1% indexing (inflation) for those numbers subject to that condition.
Investors often are conflicted on what to do with surplus cash. Your options for available cash usually fall into three categories: spending it, investing it, …
While uncomfortable to think about, effectively planning ahead for when you are no longer here can save your loved ones a great deal of time, money, and emotional hardship. Estate planning can be complicated, but there are some basic “must-do’s” that should be regularly updated and reviewed. Below is a simple checklist for making sure your estate plan is up to date.
Whether you should invest in a Tax Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP) is a question that affects almost every investor, regardless of age or amount of savings. For most, the answer is a bit of both. If you have a looming short or medium-term need (under five years) that will require funds, the untaxed TFSA withdrawals is likely the right choice. For longer term, retirement needs, you’ll want to invest in an RRSP.
Avoiding the Old Age Security clawback is typically a top priority for retirees and their advisors. Understanding how different types of investment income can affect your OAS benefit is vital when trying to keep your income under the clawback threshold.