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Cold on a Cob posted:60k. And if you withdraw the 30k, your contribution room will be 90k next year. Zettace posted:The opposite also applies. If you turn that $15k to 0 then you lose that 15k contribution room forever. I wasn’t aware of either of these stipulations. Thanks!
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Feb 22, 2021 14:48
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Got another potentially dumb question for this thread about RRSP contributions and withdrawals. I'm wondering about whether to max out my RRSP contribution for 2020. Given my tax bracket and contribution room, I'd be getting 44% of that contribution back in saved taxes going by the wealthsimple tax calculator. However, I'm also seriously considering leaving the country at some point in the next few years due to the cost of housing - does anyone have a good resource on how much I'd get dinged on withdrawals with foreign residency from the government of canada side (I assume there might be tax implications from the country I move to as well but I'll leave that aside for now). I'm trying to calculate if I'd still come out ahead given the penalties. mila kunis fucked around with this message at 18:37 on Feb 22, 2021 |
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Feb 22, 2021 18:35
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There's no requirement to cash out RRSP, if you did want to cash out it would be normal income tax rates. If you have significant enough ties to canada a deemed disposition of assets may not be necessary. The country you end up can also effect residency because of certain tax treaties. If the goal is to get out of dodge then don't let the tail wag the dog, but it is something else to consider. re: tfsa chat - if those explosive gains were from a single lucky trade/gamble (like buying GME at 100 and selling at 200 before everything imploded) you should be cool. There are a few TFSA millionaires out there that got lucky, and some of them even managed to not lose their money by trying to get lucky again.
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Feb 22, 2021 21:11
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Guest2553 posted:There's no requirement to cash out RRSP, if you did want to cash out it would be normal income tax rates. If you have significant enough ties to canada a deemed disposition of assets may not be necessary. The country you end up can also effect residency because of certain tax treaties. If the goal is to get out of dodge then don't let the tail wag the dog, but it is something else to consider. They're after day traders and swing traders and so on. I think gambling on short term trades like GME could absolutely get you nailed. https://www.theglobeandmail.com/investing/article-legal-showdown-nears-for-day-traders-cra-over-use-of-tax-free-savings/ https://findependencehub.com/retired-money-should-you-worry-a-large-tfsa-will-trigger-a-cra-audit/
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Feb 22, 2021 21:24
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mila kunis posted:Got another potentially dumb question for this thread about RRSP contributions and withdrawals. I'm wondering about whether to max out my RRSP contribution for 2020. Given my tax bracket and contribution room, I'd be getting 44% of that contribution back in saved taxes going by the wealthsimple tax calculator. When you go non-resident before retirement age, you can cash out your RRSPs at 25% withholding, which would count as a credit against foreign tax credit against the income. As of 2012 (so probably still true), only the gains in your RRSP were taxable in the US, not the funds deposited: http://gedeonlawcpa.com/do-i-pay-u-s-taxes-on-my-rrsp-withdrawal/ posted:While you’re probably aware of the tax implications of cashing out your RRSP from a Canadian tax perspective, you may not be familiar with the U.S. tax implications. So basically, you get to deduct 44% on your RRSP contribution now, and when you withdraw you do so effectively for free, give or take a temporary 25% hit that you get back when you file your US taxes. (Plus whatever earnings happened inside don't count as sheltered on US side) One other possibly relevant factor if right on the cusp is that you get partial OAS/CPP eligibility (one? both? can't remember) after ten years working in Canada.
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Feb 22, 2021 21:36
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Cold on a Cob posted:I think gambling on short term trades like GME could absolutely get you nailed. Yeah that was probably a bad example. If one bought six months ago at 10 bucks and cashed out at 250 they'd be better able to demonstrate it wasn't a quick speculatory gamble. I've read personal experiences about good faith investments in (among other things) a friend's business, weed stocks, and long equity call options that resulted in massive gains. When TFSAs as a concept were still young a number of people put 5-10k into a penny stocks as well, and those that didn't get wiped out made massive gains. When in doubt ask the CRA imo, they're usually good about things if you make the first move and haven't broken any obvious laws.
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Feb 22, 2021 23:28
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Rime posted:I am extremely pained that the resoundingly mocked GhostTTY crypto yolo from March is probably the best performing "investment" of thread 2020, by several hundred percent, today. HUT was up to $16 today. Wonder when he cashed out.
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Feb 23, 2021 01:49
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What's the go-to tax program here? My wife has used Quicktax/Turbotax for years but I've heard some people really don't like Intuit for whatever reason. I seem to recall someone mentioning one not long ago, but I went back a few pages I couldn't find it, and keyword "tax" is about as useful to search with in this forum as the word "the"
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Feb 23, 2021 20:47
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I've personally used SimpleTax (now called "WealthsimpleTax") for years. Super easy to use and free. There's a bit of grousing over the Wealthsimple buyout that happened last year, notably that you can no longer opt out of them collecting/selling your data. I'm already in the Wealthsimple ecosystem so it's a non-issue for me (though it does definitely suck).
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Feb 23, 2021 20:59
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StudioTax is (I think) a long time thread favourite. Installs locally on your computer - nothing in the cloud. I've used it for many years and have been happy. It looks straight out of the 90s but does the job. This year they switched from free to paid ($15). If you live in the north or have less than $20k income it's still free I believe. Wealthsimple Tax (formerly SimpleTax) is a free web based tax preparation option. I tried them once before being acquired by Wealthsimple and it was pretty slick. If you're comfortable with doing your taxes in the cloud, they seem like a good option. As mentioned there are some questions about collecting/selling data. GenuTax exists and is free. No experience with it. Maybe others can speak to them. Shofixti fucked around with this message at 21:28 on Feb 23, 2021 |
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Feb 23, 2021 21:08
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SimpleTax for a few years now. Definitely giving it the side eye since Wealthsimple bought them, and they added some suspicious privacy opt-out checkboxes in settings in the last year. Still planning on using it this year.
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Feb 23, 2021 21:26
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I do my taxes by hand like an old person.
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Feb 23, 2021 21:57
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Thanks I think one of the reasons people are shying away from intuit is the whole privacy aspect and  big companies but I suppose that's getting harder to avoid... although I certainly try to where I can.The inlaws typically buy a copy of Turbotax and we usually just install/use it as well since it has enough licenses with the retail version, but we certainly have no loyalty to them.. other than the ability to import from previous years.
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Feb 23, 2021 22:10
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A big reason to shun Intuit is the amount of lobbying they do to prevent the CRA from just doing everyone’s tax returns by default and having people validate it. There really isn’t a need for most people to file a full return; the CRA usually already has all the info they need.
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Feb 23, 2021 22:26
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Shofixti posted:GenuTax exists and is free. No experience with it. Maybe others can speak to them. I plug this one when I can, been using it for almost a decade with zero issue and found it better to use than some of the alternatives. SS+++, would use again.
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Feb 23, 2021 22:35
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my question re: tax software is which one will handle the new covid WFH forms the best i mean one would hope all of them but
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Feb 23, 2021 23:30
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Cat Army 
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Shofixti posted:A big reason to shun Intuit is the amount of lobbying they do to prevent the CRA from just doing everyone’s tax returns by default and having people validate it. There really isn’t a need for most people to file a full return; the CRA usually already has all the info they need.
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Feb 24, 2021 00:35
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Guest2553 posted:I plug this one when I can, been using it for almost a decade with zero issue and found it better to use than some of the alternatives. SS+++, would use again. I've rejected it in the past because it requires Windows, but now I wonder if it works in Wine.
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Feb 24, 2021 02:25
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The Iron Rose posted:my question re: tax software is which one will handle the new covid WFH forms the best I did mine with simple tax, just had to add the relevant form #
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Feb 24, 2021 02:47
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The Iron Rose posted:my question re: tax software is which one will handle the new covid WFH forms the best StudioTax has it, and I've used them for a long time with no problems: as was mentioned upthread they are starting to charge this year for the first time but I really am not fussed about finally paying for something that I've used for so long (and I've donated to them in the past).
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Feb 24, 2021 02:56
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Since I've been using WealthSimple Trade I decided to do my taxes through their Tax product for the first time and it was super smooth experience, very happy with it overall after years of using TurboTax.
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Feb 24, 2021 04:53
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pokeyman posted:I've rejected it in the past because it requires Windows, but now I wonder if it works in Wine. Let them know you'd use a Linux version! Tax prep is one of the few reasons I still keep Windows around as I'm scared about something going wrong via Wine. https://www.genutax.ca/Help/Survey
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Feb 24, 2021 05:39
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slidebite posted:I did not know that. A previous attempt was canned due to industry lobbying but it seems like we may eventually get some sort of solution. Not holding my breath on it being very robust though. https://nationalpost.com/news/polit...-taxes-for-them
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Feb 24, 2021 05:47
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Shofixti posted:Let them know you'd use a Linux version! Tax prep is one of the few reasons I still keep Windows around as I'm scared about something going wrong via Wine. Done!
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Feb 24, 2021 07:04
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Stupid, basic investing question: I have an ETF which has an ex-dividend date of Feb 22, and a dividend pay date of Feb 26. My understanding is that shareholders get their dividend calculated on the 22, and then paid on the 26. Is that correct? If so, if I liquidate my shares after the 22 (IE: Today) but before the pay date (2 days from now), I'll still receive the dividend, right?
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Feb 24, 2021 16:24
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slidebite posted:Stupid, basic investing question: As long as you sell on or after the ex-dividend date, you will get the distribution.
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Feb 24, 2021 16:38
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Sounds like I should switch from Turbotax to Genutax given recent information. By the way, I was wondering how income funds like VRIF work? Are they basically a hands off growing annuity that pays your checking account a certain amount of money each month/year and then you budget to live off that sum? How do people with lots of money then live off that money without drawing down the principal as cash from their checking accounts? Do you have to manually monitor the growth of the stock market and then sell your 4-7% gains? Or is there a system that can "pay you your salary" automatically?
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Feb 24, 2021 16:54
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Kraftwerk posted:By the way, I was wondering how income funds like VRIF work? There's a good series of posts (or a video if you prefer) starting at https://canadiancouchpotato.com/2020/09/25/unpacking-vrif-vanguards-new-monthly-income-etf/ that explain VRIF.
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Feb 24, 2021 16:59
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Does anyone know of a mortgage calculator that handles irregular extra payments? I want to (for example) calculate the effects of making lump sum payments for the first 5 years only, but all the calculators I've found will only calculate making the payments every single year.
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Feb 24, 2021 23:30
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You can probably fudge it with your 5 year term. See how much remains at the end of your 5 year extra payments period, plug that in as the new principal on a second calculation for a shorter term with smaller payments.
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Feb 25, 2021 01:29
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Here's another thing I don't really understand regarding ETFS. How do they generate passive income? Like if you had 10,000,000 in cash sitting around and invested it in say VGRO. What happens? I see cash distribution per unit which seems to be paid quarterly and then they have capital gains which appear to be reinvested into the fund. In Q4 of 2020 VGRO had a Cash Distribution of $0.13 per unit (I rounded it up). So if I understand this correctly, VGRO is worth 30 bucks on the market right now. So that's roughly 333,333 shares for your 10 million in cash. Does that mean that your brokerage account would register a cash transfer of $0.13 x 333,333 = or $43,333 per quarter? Now lets say their capital gains as reinvested are 0.11 per unit realized at the end of each year (if i'm reading the charts right). Does that mean the fund reinvests $36,666 worth of stocks sold back into the account thus realizing a growth in the underlying principal? If this is the case, does your underlying net worth grow passively with the ETF or does it grow because you reinvested the money from my assumption above? Are you responsible for calculating the taxes you owe on that 43,333 and do you need to pay taxes from that income on the capital gains of 36,666 as well?
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Feb 25, 2021 02:26
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Reinvestment is optional and called DRIP (dividend reinvestment program) - most brokerages have it off by default. Generally you will be paid dividends on the schedule of the ETF, and at tax time you'll submit a slip from your brokerage describing the dividends so that the CRA can tax you appropriately. And yes your account balance and net worth grow as you received cash dividends though ETFs will drop at payout date by the amount of the dividend and then usually re-grow so it's not an instant bump but it's a gradual increase. You are definitely responsible for the tax calculations but the information provided by brokerages is comprehensive enough to fire the numbers into any tax software. Of course none of that matters in your registered accounts though. Edit: Actually there might be some dividends on US ETFs that matter in your TFSA so let's say it matters much less Less Fat Luke fucked around with this message at 03:35 on Feb 25, 2021 |
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Feb 25, 2021 03:32
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Koskinator posted:Does anyone know of a mortgage calculator that handles irregular extra payments? I want to (for example) calculate the effects of making lump sum payments for the first 5 years only, but all the calculators I've found will only calculate making the payments every single year. I heavily modified the holypotato spreadsheet to handle extra payments a few years ago when I was looking at buying. I haven't looked under the hood since then but am like 85% sure I could figure it out if it's really getting your goat. Username at gmail if you do~
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Feb 25, 2021 04:19
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Kraftwerk posted:Here's another thing I don't really understand regarding ETFS. Return of capital will affect the adjusted cost basis of your position. Receiving a dividend is, functionally, more or less no different than selling a percentage of your portfolio worth the same number of dollars (Details are in the taxes - dividends, pay tax this year. Appreciation, capital gains realized when selling) As soon as I hear "Passive Income" in relation to personal finance alarm bells start going off in my head, because it is generally a term used by people trying to sell you some type of trading/retail investment course scam thing on TikTok or Instagram (Or by people who suggest becoming a petty tyrant of multiple rental properties, or by proponents of dividend investing strategies)
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Feb 25, 2021 07:06
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Nofeed posted:As soon as I hear "Passive Income" in relation to personal finance alarm bells start going off in my head, because it is generally a term used by people trying to sell you some type of trading/retail investment course scam thing on TikTok or Instagram (Or by people who suggest becoming a petty tyrant of multiple rental properties, or by proponents of dividend investing strategies) Yeah, I always have to reconcile this fact and that it is a legitimate term at work for corporate tax purposes. That is, if I hear it from my boss, that's one thing. But almost anyone else, and it reminds me of this tweet I saw just this morning.
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Feb 25, 2021 18:13
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has anyone done the math on whether it's worth claiming (on your tax return) the work from home benefit (t2200?) or just taking the $400 one?
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Feb 26, 2021 05:24
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the talent deficit posted:has anyone done the math on whether it's worth claiming (on your tax return) the work from home benefit (t2200?) or just taking the $400 one? depends entirely on whether or not you rent, how big your working area is, etc. If you're a homeowner it's probs best just taking the $400
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Feb 26, 2021 06:09
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As a renter with a dedicated office in the house the deduction using the detailed method came out to around $2150 for me. Increased my return by $800, so yeah if you rent, and have a room you work in (rather than a shared area of the house like the dinner table or something) then it's probably well worth it to go detailed.
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Feb 26, 2021 06:27
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Is this 15 percent of 400, or just 400?
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Feb 26, 2021 13:31
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Random question: I bank with TD and I never let my checking account drop below a certain amount. Is there any reason why I shouldn’t upgrade it to one of the more premium ones that rebate annual fees on credit cards? I don’t make enough transactions per month to benefit from the unlimited feature either. So basically do I want free credit cards and free draft checks on the super rare occasions that I would use them?
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Feb 26, 2021 17:25
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