The notion that the RRSP is better than the TFSA because of the tax refund is tricky. It works best only if you’re a high-income earner. Otherwise, the TFSA is more flexible. However, Canadian Utilities stock, a dividend all-star, is an eligible investment in both accounts.
Taxes don’t just happen once in April. They happen all year. And if you’re looking to take control of their finances, planning for and figuring out your taxes should be at the top of your list.
For most Canadians, taxes are their biggest annual expense, more than food, transportation, and even mortgage and rent. That’s why it’s very important to know the ins and outs of your income taxes. When you do, you can find ways to cut your tax bill, beef up your refund, or reduce what you owe.
But don’t worry. You don’t have to read pages and pages of tax code to master your own taxes. We aim to help you understand the essentials without bogging you down with jargon or numbers.
How to Start Investing in Canada
By Iain Butler: Chief Investment Advisor, Motley Fool Canada Fool
So, you want to start investing in stocks. Maybe become a stakeholder in some of Canada’s biggest companies? Capitalize on their growth and build long term wealth that will change your family’s financial outlook?
Investing in stocks is a wise choice, and, when done right, it can help you earn a
lot of money.
But investing in stocks is a big decision. If you are like most Canadians, you may not know where to start. Will you manage your own stocks or let a robo-advisor do the work? Do you want to handpick them or pool your money with other investors in a fund? Buy-and-sell frequently, or “set-it-and-forget-it”?
Canadians can avoid committing a huge TFSA and RRSP mistake by understanding the critical difference between the two investment vehicles. The Toronto-Dominion Bank stock is an ideal holding in either account.
Image source: Getty Images.
The Tax-Free Savings Account (TFSA) continues to rise in popularity, as evidenced by the 9.95% year-over-year increase in average annual TFSA contributions. However, in the 2019 pre-coronavirus environment, Canada Revenue Agency (CRA) data showed that only 20% of Canadians have maxed out their yearly limits.
For TFSA proponents, underutilizing the unique investment vehicle is a common mistake. Thus, the CRA data indicates that 80% of TFSA users are not taking full advantage or maximizing the benefits of tax-free money growth. The accumulated amount is now $75,500 from $63,500 two years ago regarding the maximum contribution room.
TFSA update
Bank of Montreal(TSX:BMO)(NYSE:BMO) conducts an annual TFSA survey. Its 2020 survey results reveal that many Canadians were able to increase their overall contributions during the pandemic. According to BMO Economics, the 10.6% year-over-year increase in savings in Q3 2020 made it possible. Hous