Tax season is here so don’t forget the one Essential Tax Deduction for Canadians.
In Canada, the number 1 tax deduction for high earners is the RRSP deduction. If you’re a high earner and in the marginal tax bracket of 40% and over, then contributing to your retirement plan is essential. Why? An RRSP lets you save on taxes while having your investments grow tax sheltered until you reach retirement.
Many reports say that most Canadians are woefully unprepared for retirement. So by contributing a portion of your earnings to an RRSP you kill 2 birds with one stone.
As I’ve said in the past, when it comes to investing I like to prefer no-fee or low-fee options. That’s why I invest with Questrade. The main reason I do this is because they offer free ETF (exchange-traded funds) purchases which are an excellent way for the average person to dollar-cost average into an investment.
I’m a huge proponent of the power of investing small amounts (ie. $25) over long periods of time. This allows someone to buy slowly over time in good times like now, and in the bad times that are sure to come at some point.
Dollar-cost averaging also does another important thing. It develops the all important habit of investing regularly – which as Dave Ramsay and others say is critical for long term financial success.
In addition to RRSPs, Questrade also offers TFSAs, RESPs and the usual non-tax sheltered Margin Accounts. If you want to buy and sell stocks they offer $5 fees to buy and sell which is half the price of a TD Waterhouse account.
If you’re not comfortable investing on your own, Questrade offers Quest Wealth Portfolios that take the guessing out of investing by offering a variety portfolios similar to mutual funds but with much lower fees. Want to know more? Check out Questrade’s website and if you sign up using my link you will receive $50 in free trades. For more information take a look at my Questrade Review.
For the highly motivated saver/investor Check out my article on How to Become a Millionaire in Canada
Thanks for reading the One Essential Tax Deduction for Canadians
Please note that My Road to Wealth and Freedom is an affiliate of Questrade and may receive a small commission for signups.