Comments on: How to Optimize Dividend Income Tax! http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm Building Wealth through Saving and Investing Fri, 19 Mar 2010 03:14:59 -0400 http://wordpress.org/?v=abc hourly 1 By: FrugalTrader http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-100794 FrugalTrader Fri, 21 Aug 2009 12:37:01 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-100794 BCM, there are changes to be made to this post, stay tuned! BCM, there are changes to be made to this post, stay tuned!

]]> By: Big Cajun Man http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-100793 Big Cajun Man Fri, 21 Aug 2009 12:21:02 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-100793 Can you post an updated version of this table for 2009 or is it still mostly true? Can you post an updated version of this table for 2009 or is it still mostly true?

]]> By: The Mail Bag: Dividend Question and Strategy | Million Dollar Journey http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-67197 The Mail Bag: Dividend Question and Strategy | Million Dollar Journey Thu, 15 Jan 2009 11:30:12 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-67197 [...] not as simple as getting $57k in tax free dividends in Ontario. I’ve written about how to optimize dividend income tax before and the table indicated in the article is the maximum that you can earn INCLUDING your [...]

[...] not as simple as getting $57k in tax free dividends in Ontario. I’ve written about how to optimize dividend income tax before and the table indicated in the article is the maximum that you can earn INCLUDING your [...]

]]> By: YJ http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-66772 YJ Sun, 11 Jan 2009 17:39:52 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-66772 Hi FT, Thanks for the great postings! I live in BC and am looking at the table in the link: http://www.taxtips.ca/marginaltaxrates.htm#BC Q1. I am making about $50K. The table says -0.38% for Eligible Dividends (Canadian Dividends) for my income bracket. So how did you get $68700 for BC? Q2. Are all Canadian stocks paying that pay dividends in TSX Eligible Dividends? Thanks, Hi FT, Thanks for the great postings!

I live in BC and am looking at the table in the link: http://www.taxtips.ca/marginaltaxrates.htm#BC

Q1. I am making about $50K. The table says -0.38% for Eligible
Dividends (Canadian Dividends) for my income bracket. So how did you get $68700 for BC?

Q2. Are all Canadian stocks paying that pay dividends in TSX Eligible
Dividends?

Thanks,

]]> By: newbie http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-22889 newbie Thu, 17 Jan 2008 20:29:24 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-22889 Good advice... we'll have to start looking around for one. Our taxes may start getting complicated as I am self employed, so it makes sense. I think the wealthy barber even recommends professional help. I think I'll understand investing long before I can make sense of tax documents. I consider my hubbie a genius in so many ways and he has a head for numbers (he works with them for a living, never needs a calculator and works things out to the penny in the grocery store), but even he seems confused by taxation. Good advice… we’ll have to start looking around for one. Our taxes may start getting complicated as I am self employed, so it makes sense. I think the wealthy barber even recommends professional help. I think I’ll understand investing long before I can make sense of tax documents. I consider my hubbie a genius in so many ways and he has a head for numbers (he works with them for a living, never needs a calculator and works things out to the penny in the grocery store), but even he seems confused by taxation.

]]> By: FrugalTrader http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-22776 FrugalTrader Wed, 16 Jan 2008 13:37:15 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-22776 newbie, if you plan on staying in NT for your working careers, then there is some tax benefit of keeping your dividends outside of an RRSP. However, you need to keep in mind the big picture. If you have kids etc, the extra income added onto the low income earner will reduce the child benefit from the government. If I were you, I would contact a GOOD accountant to see what the best scenario would be. newbie, if you plan on staying in NT for your working careers, then there is some tax benefit of keeping your dividends outside of an RRSP. However, you need to keep in mind the big picture. If you have kids etc, the extra income added onto the low income earner will reduce the child benefit from the government. If I were you, I would contact a GOOD accountant to see what the best scenario would be.

]]> By: newbie http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-22743 newbie Wed, 16 Jan 2008 03:43:51 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-22743 just to clarify: in NT would it be better in a couple for the low end earner (15 thousand) to do the dividend investment inside or outside a split spousal rsps, (i'm assuming outside by what you've said), or for the couple if the spouse with the high end income (73 thousand) puts dividends outside/inside? by that I mean if there is a split spousal rsp, would there be any benefit to the the higher wage earner having an additional rsp just for dividends, if that's even possible? or to simplify (because i'm even confusing myself), who should do what where? just to clarify: in NT would it be better in a couple for the low end earner (15 thousand) to do the dividend investment inside or outside a split spousal rsps, (i’m assuming outside by what you’ve said), or for the couple if the spouse with the high end income (73 thousand) puts dividends outside/inside? by that I mean if there is a split spousal rsp, would there be any benefit to the the higher wage earner having an additional rsp just for dividends, if that’s even possible?

or to simplify (because i’m even confusing myself), who should do what where?

]]> By: newbie http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-22742 newbie Wed, 16 Jan 2008 03:29:18 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-22742 so that makes it better outside of rsps? so that makes it better outside of rsps?

]]> By: FrugalTrader http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-22725 FrugalTrader Tue, 15 Jan 2008 23:19:02 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-22725 newbie, this is the tax tips chart for NT: http://www.taxtips.ca/marginaltaxrates.htm As you can see from the chart, someone making 73k in NT would pay around 5.41% in taxes on their dividends received for that year. NT is actually very favorable for dividend investors (taxation wise). newbie, this is the tax tips chart for NT:
http://www.taxtips.ca/marginaltaxrates.htm

As you can see from the chart, someone making 73k in NT would pay around 5.41% in taxes on their dividends received for that year. NT is actually very favorable for dividend investors (taxation wise).

]]> By: newbie http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-22724 newbie Tue, 15 Jan 2008 23:07:25 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-22724 I am having trouble understand the taxtips charts. Can someone tell me where would NT fit in this if you have two income family with one high (eg. 73 thousand), and one low (say 15 thousand). I am having trouble understand the taxtips charts. Can someone tell me where would NT fit in this if you have two income family with one high (eg. 73 thousand), and one low (say 15 thousand).

]]> By: Leveraged Dividend Investing for the Cash Flow | Million Dollar Journey http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-22685 Leveraged Dividend Investing for the Cash Flow | Million Dollar Journey Tue, 15 Jan 2008 13:46:26 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-22685 [...] note that Newfoundland has the highest dividend tax around, so if you are living in BC or other dividend favorable province, you'll most likely turn cash flow positive [...]

[...] note that Newfoundland has the highest dividend tax around, so if you are living in BC or other dividend favorable province, you'll most likely turn cash flow positive [...]

]]> By: FinancialJungle.com http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-22189 FinancialJungle.com Wed, 09 Jan 2008 18:50:57 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-22189 I was in the middle of writing a piece on dividend tax credit, and then stumbled on this great post of yours. Well, I'll probably just finish mine anyway even if it's redundant. I was in the middle of writing a piece on dividend tax credit, and then stumbled on this great post of yours. Well, I’ll probably just finish mine anyway even if it’s redundant.

]]> By: Adam Soltys http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-17984 Adam Soltys Mon, 26 Nov 2007 06:00:39 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-17984 [...] my RRSP this year and put any leftover cash into dividend paying stocks to take advantage of the dividend tax credit which is especially attractive to us British Columbians. So today I filled out applications for two [...]

[...] my RRSP this year and put any leftover cash into dividend paying stocks to take advantage of the dividend tax credit which is especially attractive to us British Columbians. So today I filled out applications for two [...]

]]> By: Konstantin http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-12458 Konstantin Tue, 18 Sep 2007 19:17:15 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-12458 FT /C_F, Thank you guys! FT /C_F,

Thank you guys!

]]> By: Cannon_fodder http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-12453 Cannon_fodder Tue, 18 Sep 2007 17:04:15 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-12453 Konstantin, The CRA will take the withholding tax and deem any withdrawals as income at your marginal tax rate no matter if that withdrawal was due to a dividend payout, interest on bonds, stock sold for a capital gain or loss, etc. Look for the very recent RRSP Meltdown entry for discussion on how to withdraw from the RRSP tax free. Konstantin,

The CRA will take the withholding tax and deem any withdrawals as income at your marginal tax rate no matter if that withdrawal was due to a dividend payout, interest on bonds, stock sold for a capital gain or loss, etc.

Look for the very recent RRSP Meltdown entry for discussion on how to withdraw from the RRSP tax free.

]]> By: FrugalTrader http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-12452 FrugalTrader Tue, 18 Sep 2007 17:00:37 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-12452 Konstantin, thanks for stopping by and for the compliments. ANY withdrawals from an RRSP is treated as income, thus taxed at your marginal rate. Depending on which province you're from and the tax bracket that you're in, it may be more tax efficient to keep your dividends outside your RRSP. Konstantin, thanks for stopping by and for the compliments.

ANY withdrawals from an RRSP is treated as income, thus taxed at your marginal rate.

Depending on which province you’re from and the tax bracket that you’re in, it may be more tax efficient to keep your dividends outside your RRSP.

]]> By: Konstantin http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-12451 Konstantin Tue, 18 Sep 2007 16:56:37 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-12451 FT, I am reading your blog regularly. Awesome resource! I would to ask all of you guys: I was wondering if you have 100% stocks that are dividend paying in your RRSP and you make RRSP withdrawals during the year - are they treated by CRA as dividend payouts (favourable tax treatment) or the default RRSP withdrawals tax schedule (10%, 20%, 30% withholding tax) applies? Or if it applies, will you have any tax refund come tax-time? Thank you for your responses. FT,

I am reading your blog regularly.
Awesome resource!

I would to ask all of you guys:
I was wondering if you have 100% stocks that are dividend paying in your RRSP and you make RRSP withdrawals during the year – are they treated by CRA as dividend payouts (favourable tax treatment) or the default RRSP withdrawals tax schedule (10%, 20%, 30% withholding tax) applies?
Or if it applies, will you have any tax refund come tax-time?

Thank you for your responses.

]]> By: RRSP Meltdown Strategy | Million Dollar Journey http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-12339 RRSP Meltdown Strategy | Million Dollar Journey Mon, 17 Sep 2007 07:32:27 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-12339 [...] you are in a lower tax bracket, thus having a dividend based non-registered portfolio would be very tax efficient.  Note that if you have a very large dividend based portfolio, it may affect your Old Age [...]

[...] you are in a lower tax bracket, thus having a dividend based non-registered portfolio would be very tax efficient.  Note that if you have a very large dividend based portfolio, it may affect your Old Age [...]

]]> By: How Investing Taxes Work (Part 2 - Dividends and Interest) - Million Dollar Journey http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-7170 How Investing Taxes Work (Part 2 - Dividends and Interest) - Million Dollar Journey Tue, 26 Jun 2007 16:38:21 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-7170 [...] How to Optimize Dividend Income Tax [...]

[...] How to Optimize Dividend Income Tax [...]

]]> By: Reader Mail: Optimize Pastor Brads Finances! - Million Dollar Journey http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm/comment-page-1#comment-6451 Reader Mail: Optimize Pastor Brads Finances! - Million Dollar Journey Sun, 17 Jun 2007 13:01:11 +0000 http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm#comment-6451 [...] Your passive income strategy would depend on if you expect your income to increase over the years. In Calgary, you can make up to $37100 in employment AND dividend income without paying ANY tax on the dividends. Perhaps starting a non-registered portfolio would be a good idea based on Canadian dividend paying stocks. Since you make $35K, you can make up to $1,448/year in dividends (before gross up) without paying ANY tax on them. [...]

[...] Your passive income strategy would depend on if you expect your income to increase over the years. In Calgary, you can make up to $37100 in employment AND dividend income without paying ANY tax on the dividends. Perhaps starting a non-registered portfolio would be a good idea based on Canadian dividend paying stocks. Since you make $35K, you can make up to $1,448/year in dividends (before gross up) without paying ANY tax on them. [...]

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