Move Over RRSP, TFSA – 7 Strategies For Maximizing Investment Returns

RRSP TFSAInvestors tend to focus first and foremost on gross returns. Since an investor only gets to keep their net return after-tax, tax should be an important factor when it comes to investment decisions. The most basic example of this is to make the most of available tax shelters. Most people are aware of tax shelters like RRSPs, TFSAs and RESPs, but, if you are self-employed, you can even create your own tax shelter by incorporating and leaving some of your income in a corporation, paying a lower tax rate than you would otherwise pay personally. Jason Heath outlines seven more considerations for how to make your investments more tax-efficient.  Read More…

This article has 11 Comments

  1. Anwar B.

    Very interesting post. I have never in my life heard of "flow-through shares" as a way to make my investments more efficient.

    I am still scheptical about the 50% tax refund part from CRA but then i have never heard about this whole thing before. Will do some more research. Thank you.

  2. Usher A

    The idea of incorporating as a self-employed person seems a bit off to me. Aren't there legal paperwork and lot that must go into before it is set up. And then when you leave money in the incoporated company and you want to pay yourself isn't it now double-taxed? I fail to understand how this is considered effective.

  3. Gene

    I wish there was a legal way to swap holdings to and from registered accounts (e.g. RRSP to TFSA, or vice versa) without incurring deregistering fees and withholding issues. Anyone know a correct way to do this?

  4. Dewayne Tinkey

    The full article doesn't mention that you can take out money from registered accounts (RRSP) and use towards a new home. I find that very efficient because CRA allows you to put the money back after a time without penalty.

  5. Moises

    Is Horizons Exchange Traded Funds the same that we use for Norbert's Gambit when it is talking about swap-based ETFs?

  6. Bruce

    Yup, the biggest mistake i've seen people do and that includes me is mistakenly putting in US foriegn stocks into my tfsa. grrr.

  7. Jamison Parkhurst

    Do rental properties rennovation repairs counts towards tax-deductions?

  8. Kiel Hobbs

    Funny i found out about REITs and how they return capital periodically. Glad to see i am remembering this stuff as i read new articles.

  9. Wally M

    Interesting that capital gains are only charged at 50% against ones tax rate while this country is stuck at a lower than normal minimum wage for those who don't play the stock market. Sometihng seems off about that.

  10. Harlan Heki

    Oh wait so i can't hold foreign stocks in my funds without experiencing holds even if its managed by someone else? Hmmm. Why havent i heard that before. Ok time to call my broker.

  11. Quincy W

    I still max out my TFSA and RRSP each year to help lower my tax burden year end but i just feel i need to explore other options. I will give this a thorough read and give my thoughts of past experiences since i have a feeling i've tried all 7. 🙁

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