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61 votes

Minimize taxes now that I earn more

Congratulations on an amazing rise on salary. Please pat yourself on the back for such an accomplishment. The best thing you can do is to hire a competent tax specialist. Here in the US, it is ...
Pete B.'s user avatar
  • 76.7k
55 votes

If you're loaning yourself a mortgage, why must you pay interest? At the bank's posted rate?

Don't bother. It's a stunt, and a wasteful one. The whole point of it is emotional: wanting to believe this is your money, blah blah. But money is fungible: there's no difference of this, vs your ...
Harper - Reinstate Monica's user avatar
38 votes

If you're loaning yourself a mortgage, why must you pay interest? At the bank's posted rate?

First to answer your question: Because it is the law. Period. No discussion allowed there - yes, some laws make no sense, but still, that is the reason. DO not like it? Vote for someone who will ...
TomTom's user avatar
  • 11.5k
20 votes
Accepted

Can I pay my partner’s income tax (Canada)

There is no gift tax in Canada. Neither the giver nor the receiver have to pay tax on a gift (unless it's from your employer or something similar). There are a number of rules around income ...
DJClayworth's user avatar
  • 33.4k
7 votes
Accepted

Is there any reason to choose my bank's index fund over Vanguard?

That expense ratio on the bank fund is criminally high. Use the Vanguard one, they have really low expenses.
zeta-band's user avatar
  • 3,997
7 votes

Minimize taxes now that I earn more

Minimizing taxes at your scale is more an exercise in determining which activities the government decides to tax less rather than an exercise in finding clever loopholes to exploit. You lack the ...
Jeutnarg's user avatar
  • 559
5 votes

How do I do double-entry bookkeeping for separately-managed investment accounts?

For any accounts where you have a wish to keep track of dividends, gains and losses, etc., you will have to set up a an account to hold the separately listed securities. It looks like you already ...
OneTruDragonGirl's user avatar
4 votes
Accepted

Does it ever make sense not to join DC pension?

Think about it this way: you are considering giving up a 100% guaranteed return [contribute 5% of your salary, get 5% for free from your employer] to avoid a 1.5% management fee. You would be giving ...
Grade 'Eh' Bacon's user avatar
4 votes

Building a diversified portfolio at market high

Considering that the market has grown consistently in the macro sense (the regression curve slopes up) the market is often at an "all-time high". So the only reason you would not want to invest in ...
D Stanley's user avatar
  • 136k
4 votes

Minimize taxes now that I earn more

If you own any works of art or ecologically sensitive lands you can donate those to a city government/museum/conservation trust/accredited charity and receive a tax refund for the appraised value of ...
Dugan 's user avatar
  • 2,582
4 votes

When calculating net-worth, how to discount money in an RRSP?

It depends on what you mean by "net worth". If you mean "how much money would I have now if I liquidated everything", then yes you'd take the after-tax (and penalty, if applicable) value of your ...
D Stanley's user avatar
  • 136k
3 votes
Accepted

Can I withdraw from an RRSP for home renovation using the Home Buyer's Plan?

You can withdraw the funds, you'll just have to pay tax on them as you would any other RRSP withdrawal, and you would be unable to recontribute the funds at a later date. The only exception is for ...
Grade 'Eh' Bacon's user avatar
3 votes

Option spreads in registered accounts

No, it is not the nefarious government preventing Registered Account traders from making money. They get their taxes eventually. A registered account has legal limits to the amount in a year a person ...
Gungunus vossmor's user avatar
3 votes

Why does strategy with borrowing 35,000 and using Home Buyer's Plan apply to just Canadians in 40% marginal tax bracket?

The plan works regardless of your bracket - it is one of the most tax-effective things you can do if you are planning on buying your first home, and are looking to maximize your down payment. ...
Grade 'Eh' Bacon's user avatar
3 votes

Excess contribution to RRSP

1% of your overcontribution will be paid in penalties per month. It's not just a one-time penalty. That continues until you correct the problem by withdrawing to reduce the overcontribution or until ...
ChrisInEdmonton's user avatar
2 votes
Accepted

As an American living in Canada what should I consider in determining distribution between RRSP and IRA contributions?

One question to ask yourself is: do you like being double-taxed? Let's assume that you are already contributing your maximum limit to the RRSP. Although it appears that contributions to your IRA ...
Scott Dudley's user avatar
2 votes

US withholding taxes on investments held in RRSP by non-resident of Canada

No, US dividends in a canadian RRSP are exempted from US income tax. The fact that you left Canada is irrelevant, only the registered status of your RRSP is taken into account. So as long as the ...
Armando's user avatar
  • 1,020
2 votes
Accepted

Can I withdraw money from my rrsp if I made excess contribution by mistake?

Overcontributions made after the calendar year are not usually a problem. This is because while contributions made in Jan and Feb can be counted towards the previous year, they do not have to be. This ...
DJClayworth's user avatar
  • 33.4k
2 votes

Can I withdraw money from my rrsp if I made excess contribution by mistake?

Intuit has a pretty good write-up on this subject. As you noted, you are allowed to exceed your limit by $2000 (though this overcontribution is not tax-deductible). Also, your contribution room ...
ChrisInEdmonton's user avatar
2 votes

Is there any reason to choose my bank's index fund over Vanguard?

Your bank's fund is not an index fund. From your link: To provide a balanced portfolio of primarily Canadian securities that produce income and capital appreciation by investing primarily in ...
quid's user avatar
  • 49k
2 votes
Accepted

Contribute to RRSP without deducting - how long can the deduction claim be deferred?

You can carry forward unused contributions indefinitely. The best way to prove it to you would be to read the schedule 7 that you have to fill out in order to carry them forward. https://www.canada....
brian's user avatar
  • 1,737
2 votes

Cashed RRSP For Startup Venture

Grade 'Eh' Bacon gives the correct answer, and what I am writing here will not help you as it is too late. However future readers might find it helpful. RRSPs can be put in a wide variety of ...
DJClayworth's user avatar
  • 33.4k
2 votes

Cashed RRSP For Startup Venture

No, unfortunately withdrawals from an RRSP cannot be returned on a tax deferred basis, outside of 2 specific exceptions: Money taken out for purchasing your first home (exceptions and limits apply); ...
Grade 'Eh' Bacon's user avatar
2 votes

Is there any reason to choose my bank's index fund over Vanguard?

Extortionate expense ratio aside, comparing the fund to the vanguard balanced fund (with an expense ratio of 0.19%) shows that your bank's fund has underperformed in literally every shown time period. ...
Koen vd H's user avatar
  • 731
2 votes

To lease or buy when I have the cash in my RSP

Any OAS clawback you might incur by withdrawing additional RRSP amounts, would certainly wipe out any ownership cost-benefit analysis comparing buying vs leasing. Further, you quite possibly would be ...
Grade 'Eh' Bacon's user avatar
2 votes

Can I withdraw from an RRSP for home renovation using the Home Buyer's Plan?

Depending on the ratio of the value of the home and the equity you have uncovered, you could qualify for a Home Equity Line of Credit (HELOC). Typically, Canadian banks will give HELOC loans if your ...
Lan's user avatar
  • 2,680
2 votes

Paying for Spouse's Education with Savings vs Line of Credit vs RRSP (LLP)

Why not a 4th, but arguably better option? Normally with big money decisions there is always another option! Why not Cash flow the 15k? Why you wouldn't go for: Option 1 - Never reduce your ...
MattR's user avatar
  • 131
2 votes

Ought a 63-year old working hotel employee commence an RRSP?

Given his TFSA is entirely maxed out, it is not necessarily true that he shouldn't contribute to his RRSP; the benefits will just be smaller than they would be under different circumstances. The ...
Grade 'Eh' Bacon's user avatar
2 votes

Minimize taxes now that I earn more

Disclaimer: I'm from the US so I might get parts of this wrong. One way you might be able to reduce your taxes is to invest in real estate. In the vast majority of countries real estate is taxed ...
user1781498's user avatar
2 votes

What other variables affect optimal contributions to RRSP now?

The biggest thing that seems to be missing is compounding interest on investments. The sheet just calculates a growth rate of 500% based on "...5% growth over 10 years. Obviously that ignores ...
Dugan 's user avatar
  • 2,582

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