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63

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 typically an accountant and they would tell you that there is not much they can do. Maximizing tax favored retirement accounts is about the best one can get away ...


54

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 RRSP loaning to somebody else's mortgage while you borrow from a bank. The RRSP money is tax sheltered, "restricted" money. It's not your money (yet); it's ...


38

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 change it. The reason is that the money there is pre-tax and you are not allowed to USE it for yourself before retirement. Having a mortgage which pays market rate ...


7

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 resources (and the tax burden) to make use of the more intensive tax avoidance strategies in a feasible or efficient manner. Sorry, but no tax havens, no accountants,...


4

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 the donation. This would only net you a tax benefit if the appraised value was greater than what you spent, but it would deprive the government of money if that'...


3

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. Effectively you take a deduction from your income tax this year, and only need to contribute to your RRSP over the next 10 years [Well, really you contribute today, ...


3

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 benefit of an RRSP contribution today, is an immediate deduction from his income on this year's tax return. The penalty of an RRSP withdrawal in the future, is that ...


2

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 very well. It appears you can deduct theoretical real estate losses against salary in Canada. There are legal ways to make it look like you're making a loss to the ...


2

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 can contribute to their account. How much money they earn within the account has no limit. If you trade naked options, there exists a condition (a bad trade) ...


2

Here is the key line from your sources: "Your contribution limit is the total of this years deduction limit and any unused contribution room you have." That is: You can contribute the total of all of your historical unused room, + the new room you created this year from additional employment income.


1

There is no simple calculation for the optimum RRSP contribution. Your best contribution depends (among other things) on how much income you expect to get in future years, and how much income you expect to withdraw per year when you retire. For an example of case 1, if you expect to get much more income next year than this year, then you may be better ...


1

The question you have is: should you invest in RRSP's, or in a non-tax advantaged account? There are a few downsides to RRSPs, and you've listed one of them. In general, they are: Compared to TFSA's, less flexibility [not applicable to you as you max your TFSA]; Compared to RESP's, no government grant for children's college savings [not applicable to you ...


1

When you make a RRSP contribution, the amount of the contribution is subtracted in the calculation of the taxible income. For example, the person in the 21% MTR bracket who has an income of $30,000 and makes a contribution of $5,400 has reduced his taxible income from $30,000 to $24,600 (30000 - 5400). The calculation of tax on an income of $24,600 is 21% *...


1

When you contribute money to an RRSP you get a refund of the income tax that you paid on it. This is why RRSPs can be thought of as a tax-deferral system, i.e. you don’t pay income tax on it in the present, but you will have to pay it in the future. Many people fixate on this aspect and complain about how they’ll have to pay taxes on their withdrawals at ...


1

Your formula above is correct in terms of maximum return on investment for RRSPs. The "optimal" RRSP contribution really depends on your anticipated financial future and savings goals. RRSP contributions are refundable tax credits, which means you get the entire amount of income tax paid on that dollar amount refunded. This is because RRSPs are taxed when ...


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