Tag Archives: RRSP

Use RRSP, TFSA, RRIF and RDSP plans to Save Taxes

Tax saving Tips with RRSP, RESP, RDSP, ​TFSA and others​

Tax SheltersRRSPs and TFSAs are amazing tax shelters that can help you hold onto thousands of dollars of your hard-earned money every year. The RRSP lets you defer paying taxes on a portion of your yearly income until you retire in a lower tax bracket—which will be true for most people.​

Tax SheltersMaximize your RRSP or TFSA contribution limits. Keep in mind that the investment interest you get from bonds and GICs is taxed at a higher rate, so in general, put your fixed-income investments in the tax shelter, and keep your stocks and dividend payers outside.

Tax SheltersTax Reduction Tips with RRSP, RESP, RDSP, ​TFSA and others​

Make contributions to it in the name of your lower-earning partner. You’ll get the same advantage as if you were putting income into your own RRSP (a tax refund on contributions), but here’s the kicker: when the money is later withdrawn, it will be taxed in your lower-income spouse’s hands at a lower rate. ​​

  • Just be aware of the Canada Revenue Agency’s attribution rules: you can’t make a contribution in the same year you withdraw the money, or in either of the two previous tax years. ​​

Plus, the total combined contributions to your own RRSP and your spouse’s RRSP cannot exceed your own deduction limit.​

Tax SheltersMax your RRSP

  • Registered retirement savings plans (RRSPs) are the government’s weak apology for gouging citizens on their taxes.
  • You may as well use the bone they throw you and get the most out of this chance.
  • When speaking about borrowing to buy investments, maxing out your RRSP is usually a sensible decision provided that
    you are able to service the loan in a reasonable period of time.

Tax SheltersKeep contributing to TFSAs well past 71

And unlike RRIFs, there are no forced annual withdrawals.

Each member of a senior couple can invest $5,500 into his or her TFSA annually, meaning the two of you can convert $11,000 worth of RRIF withdrawals and non-registered savings into TFSAs each year.

Use RRSP, TFSA,RRIF & RDSP plans to Save TaxesRegistered Disability Savings Plan (RDSP)

For eligible Canadians, money placed in a Registered Disability Savings Plan (RDSP) grows tax-free and can net a staggering 300% return.

Tax SheltersEarn free tuition money

What would you say if someone offered a 20% return on every dollar you squirrelled away for your kid’s university tuition?

Well, setting up a Registered Education Savings Plan lets you do exactly that: with an RESP, the first $36,000 you contribute is eligible for the 20% Canada Education Savings Grant (CESG).

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Home Buyers’ Plan

Home Buyers’ Plan: Registered Retirement Savings for down payments. Canada Revenue Agency’s Home Buyers’ Plan lets qualifying home buyers use up to $25,000 of their Registered Retirement Savings Plan (RRSP) to buy a home. Couples can use up to $50,000. The home must be the principal residence, the home buyers must not have owned a home within the past five years and the loan must be repaid within 15 years.

Continue reading Home Buyers’ Plan

Buying or Selling a Home in Canada

Buying or Selling a Home in Canada

Tax Tip: What you should know
News Room | Canada Revenue Agency | February 02, 2017 15:57 ET
OTTAWA, ONTARIO- If you bought your home in 2016 or plan to buy a home, the Canada Revenue Agency (CRA) has information that may help you.

Buying or Selling a Home in Canada Principal Residence Exemption

Sold your principal residence in 2016? File a tax return and claim the principal residence exemption for capital gains.

Starting with sales in the 2016 tax year, you are required to report basic information (date of acquisition, proceeds of disposition and address) on your income tax and benefit return when you sell your home to claim the full principal residence exemption. You do not have to pay tax on any capital gain when you sell your home if it was your principal residence for all the years you owned it and did not use any part of it to earn income. A property may qualify as your principal residence for any year that you or certain family members lived in it, if none of you designated another property as a principal residence for that year.

Home buyers’ amount

If you are a first-time home buyer, you may be able to claim $5,000 for the purchase of a qualifying home in 2016.

You qualify for the home buyers’ amount if you did not live in another home owned by you or your spouse or common-law partner that year or in any of the four preceding years.

A qualifying home must be located in Canada and registered in your name and/or your spouse’s or common-law partner’s name according to the applicable land registration system. It includes existing homes, such as single-family houses, semi-detached houses, townhouses, mobile homes, condominium units, apartments in duplexes, triplexes, fourplexes, or apartment buildings, as well as homes under construction.

You do not have to be a first-time home buyer if:

you are eligible for the disability tax credit; or
you acquired the home for the benefit of a related person who is eligible for the disability tax credit.

Buying or Selling a Home in Canada Home Buyers’ Plan

You may also be eligible to participate in the Home Buyers’ Plan (HBP), a program which allows you to withdraw funds from your registered retirement savings plan to buy or build a qualifying home for yourself or for a related person with a disability. You can withdraw up to $25,000 in a calendar year, and you have up to 15 years to repay the amounts you withdraw. Your first repayment starts the second year after the year you withdrew the funds from your RRSPs for the HBP.

To qualify for the Home Buyers’ Plan:

you must be a first-time home buyer; and
you must have a written agreement to buy or build a qualifying home for yourself.

You are considered a first-time home buyer if, in the preceding four-year period, you did not live in a home that you or your current spouse or common-law partner owned.

You must intend to live in the qualifying home as your principal place of residence within one year after buying or building it.

Home Buyers’ Plan for persons with disabilities

You do not have to be a first-time home buyer to participate in this plan if you are eligible for the disability tax credit or if you acquired the home for the benefit of a related person who is eligible for the disability tax credit. The purchase must be made to allow the person with the disability to live in a home that is more accessible or better suited to their needs.

Contact Information

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Canada Revenue Agency
613-941-6269