Search found 725 matches

by cardhu
04 Mar 2024 16:04
Forum: Taxing Situations
Topic: Tax Instalments
Replies: 940
Views: 103072

Re: Tax Instalments

anyone know how to go about getting my money back? Which money, the recent instalment? The fact that you’re getting a refund for 2023 doesn’t really reveal anything about your need to pay 2024 instalments. Your instalment obligation for 2024 is based on your 2024 income. Maybe I can ask Revenue Canada for an adjustment to the taxes withheld at source on my salary, equivalent to the tax instalment overpayment. I expect there’s zero chance they would agree to do that for someone who is on the instalment treadmill. If you think the first quarter instalment was too much, you could reduce the amount of your June instalment to compensate … generally speaking, though, if you’re going to short-pay an instalment, its better to do it in the latter p...
by cardhu
04 Mar 2024 15:19
Forum: Retirement, Pensions and Peace of Mind
Topic: Making contribution into SRRSP
Replies: 18
Views: 532

Re: Making contribution into SRRSP

I think especially with nowaday's sublevel customer service training at different financial institutions, it's always preferred to keep things as straight forward and simple as possible to avoid mishandling. Customer service isn't really the issue ... if problems occur, I think they’re far more likely to be caused by confused customers than by financial institutions … there’s no “mishandling” if the FI is simply following the customer’s instructions … at the end of the day, customers have to take some responsibility for their own actions, and should not expect financial institutions to read their minds. My income is higher than my spouse's. In that case, your opening post in this thread makes no sense … why would you even have a spousal RR...
by cardhu
04 Mar 2024 12:41
Forum: Financial Planning and Building Portfolios
Topic: Registered Disability Savings Plan (RDSP)
Replies: 12
Views: 508

Re: Registered Disability Savings Plan (RDSP)

True, the DTC is not "forever" ... but would that require the closure of existing RDSPs? I suspect not.
by cardhu
04 Mar 2024 10:26
Forum: Under the Mattress: Protecting Your Money
Topic: How to transfer my private pool funds RRSP out of my investment company over to a DIY brokerage
Replies: 6
Views: 430

Re: How to transfer my private pool funds RRSP out of my investment company over to a DIY brokerage

Retired Nomad wrote:I was unaware that Qtrade had its own form so thanks for that.
All financial institutions have their own forms … you (the investor) should never need to hunt down the form independently, and if you do, the institution could reject it in favour of using their own form anyway … this kind of transfer is always initiated by the receiving institution so if you want to transfer to Qtrade, then talk to Qtrade about transferring … they’ll have a routine process in place, they’ve done this thousands of times … just specify “transfer in cash” and your existing assets will be liquidated immediately prior to transfer.
by cardhu
04 Mar 2024 10:15
Forum: Financial Planning and Building Portfolios
Topic: Registered Disability Savings Plan (RDSP)
Replies: 12
Views: 508

Re: Registered Disability Savings Plan (RDSP)

Geo Engineer wrote:what are the easiest psychological conditions to get RSDP qualification for?
Does your colleague have the opportunity to pick and choose which “psychological condition” to claim?

Eligibility to open a RDSP hinges on eligibility for the Disability Tax Credit (DTC) … and eligibility for DTC hinges on the effects of the condition, not on the name of the condition (ie. two people with the same diagnosis could be suffering vastly different severity of effects)
by cardhu
04 Mar 2024 10:03
Forum: Retirement, Pensions and Peace of Mind
Topic: Making contribution into SRRSP
Replies: 18
Views: 532

Re: Making contribution into SRRSP

If I also have RRSP contribution room, can I contribute to the same SRRSP and claim the tax deduction myself. You can if you wish … but there are some disadvantages to doing so, that can be avoided by making your contributions to your own individual account … spousal RRSPs are subject to special attribution rules that could be unfavourable (tax-inefficient) if you think there’s any chance you might need to take a withdrawal early … that’s about the only real downside to commingling … you do have to be careful to make sure the receipt is issued correctly, but that is true of all spousal RRSPs, regardless of whether they are commingled or not. I started contributing to spousal RRSP about 35 years ago … we kept my wife’s personal RRSP separat...
by cardhu
04 Mar 2024 09:59
Forum: Retirement, Pensions and Peace of Mind
Topic: Making contribution into SRRSP
Replies: 18
Views: 532

Re: Making contribution into SRRSP

StuBee wrote:My question is if you merge a spousal and a personal RRSP and the annuitant withdraws before the three year period of no contributions is up how does the government attribute the withdrawal?
Couldn’t be simpler … every dollar withdrawn from a spousal RRSP is subject to attribution, up to the total amount of spousal contributions in the pertinent 3 year period … so for example if $80,000 of spousal contributions were made during that period, then only the first $80,000 of withdrawals in that year are attributed, and additional withdrawals beyond that amount are not.

The potential for attribution is really the only downside … concern over tax slip “problems” is blown way out of proportion.
by cardhu
01 Mar 2024 17:29
Forum: Retirement, Pensions and Peace of Mind
Topic: Making contribution into SRRSP
Replies: 18
Views: 532

Re: Making contribution into SRRSP

StuBee wrote:So, if I understand rightly, her personal RRSP (of which she is beneficiary) and the spousal plan (that you contributed to and of which she is beneficary) were merged into one plan.
I think you mean annuitant, as opposed to “beneficiary” … unless QC has its own unique terminology? … in the rest of Canada, beneficiary of an RRSP refers to who the person who the account is left to, after its annuitant dies.

I don’t know LAJ’s case, but in my own case, I stopped contributing to my wife’s spousal RRSP several years before there was any need to withdraw.

Its not particularly complicated if withdrawals occur before that time, though … unfavourable, perhaps, but not complicated … you just apply the attribution rules
by cardhu
01 Mar 2024 15:52
Forum: Retirement, Pensions and Peace of Mind
Topic: Making contribution into SRRSP
Replies: 18
Views: 532

Re: Making contribution into SRRSP

Whose income is higher?
by cardhu
29 Feb 2024 10:08
Forum: Taxing Situations
Topic: Are MERs tax deductible expenses?
Replies: 16
Views: 890

Re: Are MERs tax deductible expenses?

The way Bruce put it kinda makes sense to me but the way you put it, I don’t get it. It’s the same thing … lets say the fund earns income of $2 (per unit), composed of some mixture of interest, dividends, and foreign income … being a fund, it must distribute that income (and more importantly, the tax obligation arising from that income) to its unit-holders … but, being a fund, it must also pay its expenses … so lets say that it has expenses (MER) totaling $0.50 (per unit) … it uses $0.50 of the income to pay its expenses and claims a deduction within the fund for that expense … so that leaves the fund with $1.50 remaining of the income it earned, which is still exposed to taxation, so it distributes $1.50 to its unit-holders and passes the...
by cardhu
28 Feb 2024 14:19
Forum: Taxing Situations
Topic: Are MERs tax deductible expenses?
Replies: 16
Views: 890

Re: Are MERs tax deductible expenses?

formerpatriot wrote:Tuesday morning humor?
Regardless of what day it is, not sure what is “humorous” about it … it is the same concept, and in many cases the outcome is mathematically identical … similar to how OAS clawbacks are “deductible”.

It is the indirect deduction that Bruce referred to, flowing through to the fund-holder.
by cardhu
26 Feb 2024 16:40
Forum: Taxing Situations
Topic: Tax Instalments
Replies: 940
Views: 103072

Re: Tax Instalments

bpither wrote:This year in addition to a tentative April tax balance owing of$2400 I have to pay the OAS clawback (aka Social Benefits Repayment Lines 23500 and 42200) of around $5000.
$7400 exceeds $3000 ... therefore, instalments will be triggered.

https://www.canada.ca/content/dam/cra-a ... ll-24e.pdf
bpither wrote:I'm assuming they require instalments on taxes and not a combined $7400 as Service Canada will sort out the new OAS payout in July.
Your logic is flawed, your OAS benefit amount may be reduced by ~$5000 for next year, but that won't reduce your tax obligation by $5000.
by cardhu
22 Jan 2024 14:16
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: First Time Home Buyer - Smith Maneuver Questions
Replies: 16
Views: 1438

Re: First Time Home Buyer - Smith Maneuver Questions

In terms of the investment loan - I would probably just hold XEQT or something like that. That’s not a bad choice … and its had a decent run in its ~4.5 year life … so imagine you had bought a house just as XEQT was being launched, but imagine that interest rates then were around what they are today. To run this simulation, we need to make a few assumptions … you haven’t said which province this VHCOL area is, so I’ll just randomly pick BC tax rates and I’ll assume your tax bracket equates to a high-5-figure income (you said you can’t afford to continue contributing to saving while carrying a mortgage). Lets say you take a $500k mortgage for 5 years at 5%, with monthly payments, amortized over 25 years … that makes for payments of ~$2,908/...
by cardhu
22 Jan 2024 13:49
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: First Time Home Buyer - Smith Maneuver Questions
Replies: 16
Views: 1438

Re: First Time Home Buyer - Smith Maneuver Questions

My understanding of the manoeuvre, simplistically, is something like this: 1. Say you own an investment portfolio (paid for) 2. You want to buy a house. You have borrowing capacity. 3. If you borrow to buy the house, of course the interest will not be deductible. 4. So instead, you sell the investment portfolio and use the proceeds to buy the house (simplistic example assumes sufficient proceeds). Then you borrow against the house (secured by mortgage) to repurchase the investment portfolio, or better yet, a somewhat different investment portfolio. 5. So then, your borrowing was on its face to buy investments, and therefore the interest is deductible. That’s not a Smith Maneuver … SM is of no use in BUYING a property, you have to already o...
by cardhu
22 Jan 2024 13:38
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: First Time Home Buyer - Smith Maneuver Questions
Replies: 16
Views: 1438

Re: First Time Home Buyer - Smith Maneuver Questions

Smith Maneuver (SM) is a valid approach and can make sense in some cases, but this doesn’t strike me as one of those cases … you said yourself that you can’t afford to simultaneously carry a mortgage and contribute to savings … that’s not really a scenario where SM works very well. Barring inheritances, lottery wins, and the like (ie. money falling out of the sky), if you want to generate long-term wealth, you need to contribute … its pretty hard to escape that … there is no method that causes long-term wealth to simply materialize out of thin air, and SM certainly doesn’t … if you can’t afford to carry a mortgage while continuing to contribute to savings, then you have a simple choice to make … pick one or the other … rest assured you woul...
by cardhu
15 Jan 2024 22:28
Forum: Taxing Situations
Topic: estate planning for the accidental death of both parents
Replies: 47
Views: 1852

Re: estate planning for the accidental death of both parents

Have the conversation with the beneficiaries. If they're worried about that circumstance, offer to set up life insurance to cover the tax liability - but THEY have to pay the premiums. That’s an inappropriate conversation for young children … which is really the ONLY scenario where parents need to be concerned about dying together. I can see the case for life insurance to cover taxes in the case of a family business that would otherwise need to be liquidated, or a family cottage that would otherwise need to be sold … but if its only a matter of covering the tax bill on ordinary investments, I wouldn't agree to insurance no matter who pays for it. My beneficiaries will get whatever is left over after I’m finished with it … if they are finan...
by cardhu
15 Jan 2024 20:33
Forum: Taxing Situations
Topic: estate planning for the accidental death of both parents
Replies: 47
Views: 1852

Re: estate planning for the accidental death of both parents

My wife worked at a couple of travel agencies for a while, back when travel agencies were a thing … they had lots of clients who always flew separately, while they had young children. … collapsing of both registered accounts along with non registered would yield a tax bill in the regions of 6 or 7 digits? It would be a full blow? Oh … for some reason I thought you were referring to having a parent alive to raise the children … my mistake. As far as taxation goes, the glaringly obvious counterpoint to the old “What if I die” scenario is … “What if you don’t?” … my retirement planning has numerous assumptions underpinning it, but the fundamental assumption, without which the rest would be irrelevant, is that during my retirement I will be ali...
by cardhu
06 Jan 2024 16:54
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: TFSA 2024
Replies: 68
Views: 5284

Re: TFSA 2024

This thread seems like some kind of competition ... what's the big rush?
by cardhu
06 Jan 2024 16:48
Forum: Taxing Situations
Topic: turbotax - web-based vs local install ?
Replies: 47
Views: 3995

Re: turbotax - web-based vs local install ?

Standard version is all I've ever used. I don't know why you'd want to split medical or donations, usually those are best combined and applied by one spouse or the other (lower income spouse for medical, either one for donations). If by "income splitting" you're referring to investment income that under the attribution rules must be split, then yes the Standard version does allow you to assign % attribution in the T-slips section for things like interest income, dividends, etc. Mind you, I've never used that feature, because we never commingle accounts.
by cardhu
03 Jan 2024 16:31
Forum: Financial Planning and Building Portfolios
Topic: How did you do in 2023?
Replies: 97
Views: 6949

Re: How did you do in 2023?

2023 year-end numbers 1 yr ..... 8.14% 3 yr ..... 7.66% 5 yr ..... 9.09% 10 yr ... 7.20% 20 yr ... 6.85% 38 yr ... 6.55% XIRR … all in, all accounts 5 , from the beginning of time … Not measured against any particular benchmark. Time weighted returns are an interesting curiosity but they don’t reflect the real world, so I ignore them. Current allocation, is roughly 70/30 … although in my case asset allocation is a result, not a target. ~ 10% cash or cash-equivalent ~ 4% true fixed income ~17% pseudo fixed income (preferreds) ~37% CAD equity (excl. precious metals) ~27% foreign equity (excl. precious metals) ~ 5% precious metals equity Some footnotes: 1. All measured in CAD$ … so foreign holdings performance is a combination of actual invest...
by cardhu
28 Nov 2023 12:06
Forum: Under the Mattress: Protecting Your Money
Topic: High interest savings, GICs and MMFs (2023)
Replies: 1056
Views: 87005

Re: High interest savings, GICs and MMFs (2023)

DenisD wrote:
NorthernRaven wrote: TDB2913 (MMF) and TDB2914 (Premium MMF)
I thought they were the same fund? Just different fee for the different units.
They can’t be the same underlying fund if they’re both Class D.
by cardhu
27 Nov 2023 13:56
Forum: Taxing Situations
Topic: Tax Instalments
Replies: 940
Views: 103072

Re: Tax Instalments

Would CRA pay me interest if I prepaid all four tax instalments in January? If so, at prescribed rate? No, its not a savings account … the instalment interest credit described upthread can only be used as an offset against instalment interest charged within the same tax year … it is never, under any circumstances, paid out to the taxpayer and cannot be carried forward to future tax years … so if you arrive at April 30 of the following year with a net credit from having prepaid all your instalments in January of the prior year, that credit will go to waste, it is zeroed out and you start from scratch for the next year’s instalments. BTW - CRA’s prescribed rate for instalment interest is currently 9% … projected to rise to 10% in 24Q1 … the ...
by cardhu
22 Nov 2023 23:03
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: First Home Savings Account (FHSA)
Replies: 116
Views: 12315

Re: First Home Savings Account (FHSA)

ig17 wrote:Am I missing anything?
Yup ... you don't have to have any unused RRSP contribution room in order to do the rollover ... its essentially $40k of "bonus" RRSP contribution room, over and above what the rest of the world gets.
by cardhu
22 Nov 2023 21:21
Forum: Taxing Situations
Topic: Tax Instalments
Replies: 940
Views: 103072

Re: Tax Instalments

Missed this one …
DavidR wrote:If CRA sent an instalment reminder for $xxx due Sept 15, and you made the payment on Nov 15, then they would charge you 2 months of instalment interest on $xxx.
Not necessarily … if $xxx was too high an amount, based on prior year’s filing, and this year’s income will be lower, then they’d only charge instalment interest on whatever the installment amount ought to have been. They don't charge instalment interest on amounts you were never obligated to pay in the first place.
by cardhu
22 Nov 2023 21:02
Forum: Taxing Situations
Topic: Tax Instalments
Replies: 940
Views: 103072

Re: Tax Instalments

scorpionman wrote:What if you use option #3, …… But if you use option #1, …..
There are 3 optional methods you can choose from, to pay your instalments … if you deviate from Option 1 paid on time, they’ll run the installment interest calculation using each of the 3 methods, and whichever one produces the least interest, is how much you’re charged.
pmj wrote:Is this true, or was some of the wording above "less-than-accurate"?
It is true, and the wording was exactly accurate … both the interest accrual and offsetting credit are at the same rate.

You referred to “the general case” … instalment interest is not a general case, it has its own calculation … CRA uses what they call the offset method, which assumes an equal rate in both directions.