Not sure how to make a savings plan? Read on…
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How does a TFSA work? + MORE Dec 3rd
One of the side-effects of working for a personal finance magazine is that I’m always asked for advice. I always oblige, albeit sheepishly, without letting on that I’m still learning, too (which I freely admit here). For instance, the other day I was having lunch with some friends when we starte.... More »
Planning to cash in on your home to help fund retirement? Here’s how to do it right + MORE Dec 19th
Elizabeth and Charles have a home worth about $1.3 million. They’re considering selling and downsizing to a smaller unit to bulk up retirement savings. We ask experts for advice on the right move..... More »
OAS payment dates in 2025, and more to know about Old Age Security + MORE Apr 2nd
If you’re approaching or planning for retirement, you may have questions about Old Age Security (OAS) benefits, like: Do I need to apply for OAS? How much will I receive in OAS? When do OAS payments go out? We cover these questions and more below. But first, here’s a quick overview of how OAS wo.... More »
How to stake Cardano (ADA) in Canada + MORE Nov 14th
Like other cryptocurrencies, ADA, the native coin of the Cardano blockchain, has been in a bear market since October 2021—meaning a recent pattern of price declines. Despite this downturn in crypto prices, Cardano seems to be a strong player among the public blockchains that offer smart contract f.... More »
My three kids chose different educational paths. How do I withdraw RESP funds in a way that’s fair to them and avoids unnecessary taxes? + MORE Sep 4th
Q. I have a registered education savings plan (RESP) for my three children, the youngest of whom is starting university this fall. We have made some withdrawals for the older two kids but the plan is still well-funded. Our middle child has decided to pursue a co-op university program, which is .... More »
2020 Tax Changes by Province or Territory
– ratesupermarket.ca
The word “taxes” is enough to give most of us a headache. Paperwork, deductions, contributions, Canada Pension Plan (CPP), this type of tax, and that type of tax, federal and provincial — what a nightmare. The good news is the tax-filing deadline for most Canadians is April 30, 2020, which is still months away. And, unless you are making last-minute Registered Retirement Savings Plan (RRSP) contributions, you won’t have to think about your 2019 taxes for a few more weeks.
Nevertheless, as the new year chugs along, an entirely new set of tax changes will come into effect throughout 2020. Many Canadians will see lower taxes, albeit the changes are subtle.
To start, the basic amount Canadians can earn tax-free will increase by $1,160 to $13,229, which will result in lower federal income taxes. This amount is expected to rise to $15,000 by 2023. But this won’t mean much for those in the top tax brackets, who may not see a benefit at all.
The CPP tax rate is rising by 0.15%, that’s an increase of up to $97 in 2020…
Do RRSPs Save You Taxes in the Long Run?
– ratesupermarket.ca
For the first-time RRSP investor, it can be a challenge to understand how RRSPs can save you money. Contributions to your RRSP reduce your immediate tax burden, but you do pay tax on withdrawals. While it’s true that RRSPs may be more properly understood as a vehicle for tax deferment instead of savings, you may still pay less in tax in the long run. Here’s how the math works on RRSPs so you can make the most of this very popular savings vehicle.
How do RRSPs save taxes?
Contributions to your RRSPs reduce the tax you pay for your upcoming income tax payment. The amount of your contribution is tax-free for that year. For example, if you make $50,000 and put $10,000 in your RRSPs, you’ll only pay income tax on $40,000.
You do pay tax, however, whenever you take money out of the RRSP. It is added to that year’s taxable income. Here’s where you can save money with proper planning. If you make contributions during a high-income year, you save on income that would be taxed at a higher rate…
