Non-Residents for Tax Purposes
Individuals can define their residency in two ways: immigration
residency and tax residency. An individual s tax residency
determines to which country the individual pays taxes. The Canada
Revenue Agency determines whether an individual is a Canadian tax
resident based on the individual s residential ties to Canada
and other countries based on the Canadian Income Tax Act and any
applicable tax treaties. A Canadian tax resident may break their
residential ties with Canada and become tax resident of another
country while continuing to receive income from Canada. In these
cases, Canada may continue to tax the income deemed to be coming
RRSP Deadline 2021: Last Chance to Reduce Your 2020 Tax Bill
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The Registered Retirement Savings Plan (RRSP) is an incredibly important tool. Almost every Canadian will need to utilize the RRSP at some point in your life. So, it’s no surprise that many investors will want to know when the RRSP contribution deadline is.
The RRSP has several important advantages for Canadians. It’s important to understand all the rules and regulations involving the RRSP. This way, you can take full advantage of all the benefits available to you.
One of the biggest advantages it offers Canadians is the ability to invest your RRSP contributions into high-quality stocks. This will allow Canadians to start earning income on their savings. And over time, with compounding interest, that income will grow to be quite significant.
3 TFSA Tips to Remember in 2021
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The Canadian government announced that the annual contribution limit for the Tax-Free Savings Account (TFSA) would stay at $6,000 in 2021. This increased the cumulative limit to a whopping $75,500. The TFSA was launched in January 2009. This account provides great flexibility to Canadian investors. Moreover, it gives investors the opportunity to gobble up tax-free capital growth and income.
Today, I want to go over three top TFSA tips that Canadians should remember in 2021. Let’s jump in.
Don’t leave everything in cash!
Late last year, I’d discussed an interesting trend that had emerged during the COVID-19 pandemic as it relates to Canadian TFSAs. While the economic situation in Canada has deteriorated, savings rates have been bolstered. This may come as no surprise, as leisure activity has been torpedoed by restrictions and lockdowns.
TFSA Announcement: You Can Invest Over $75,000 Now in 2021!
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Were you 18 years old or above when the Tax-Free Savings Account (TFSA) was introduced but has never opened one? The TFSA’s contribution room is accumulating for 12 years. From 2009 to 2021, the total available contribution room for a TFSA is now $75,500.
Existing users will have a new $6,000 annual contribution limit. If you have that many investible funds or free cash to invest, make use of the tax-advantaged account. All interest, earnings, gains or dividends in a TFSA are 100% tax-free.
Stocks, bonds, exchange-traded funds (ETFs), guaranteed investment certificates (GICs), and mutual funds are the qualified investments in a TFSA. Cash is too, but it’s not the place to hold idle money. TFSA balances accumulate faster than ordinary savings accounts because contributions are not tax-deductible.