Tips and Ideas – Montreal

We suggest contributing to these only five years before your retirement, rather than earlier. The average return on these investments is generally lower than the market average.

If you have a spouse and your income is significantly higher than theirs, it is in your interest to contribute to a Spousal RRSP. You become the contributor, and your spouse becomes the annuitant. This way, withdrawals during retirement will be taxed at a lower rate.

If you have investment income (interest, dividends, or capital gains), you should take advantage of a TFSA (Tax-Free Savings Account). You will no longer have to pay tax on your investment earnings.
Note: Annual contribution limits vary by year; please consult us for current limits.

If you or your spouse receive QPP income, you should request to split your income at the source. A simple phone call from you is all it takes.

Si vous avez 65 ans, et ne touchez pas de revenu de pension de votre employeur, vous auriez intérêt à convertir une partie de votre REER en FEER, vous permettant ainsi un retrait de 2000 $ par année libre d’impôts.

If you and your spouse (or a child with tuition fees) each have your own accountant, there is a risk that your returns are not fully optimized. By grouping a family's returns with the same accountant, you can often reduce your overall tax bill.

UCCB: If you have children under age 6, you are entitled to the Universal Child Care Benefit (UCCB).

RESPs: If your children plan to attend CEGEP or University, take advantage of the RESP program, which provides a federal grant of at least 20–25%. Additional grants may be available if family income is below $80,000. It is best to contribute for 4 or 5 years before the child turns 21.

Childcare: If your household income is below $126,000, tax credits for private daycare can reach 75% of the amount paid. There is often no significant cost difference between private daycare and subsidized "$7" (fixed-rate) daycare for families in this income bracket.

It may be beneficial to be paid for the hours you actually work for a charity and then donate that salary back to the organization. You will receive a tax refund because the tax credit for the donation is often worth more than the tax paid on the salary.

If you have not owned a home in the past 5 years (neither you nor your spouse), you may be eligible for a non-refundable tax credit of $750 at the federal level in the year you purchase your home.

HBP (Home Buyers' Plan): Under the same conditions, you can withdraw funds from your RRSP through the HBP. This allows you to pay back your RRSP interest-free over a 15-year period.

It is generally better to pay Revenu Québec instalments before CRA (Canada Revenue Agency), as penalties and interest rates are typically higher at the provincial level.

To maximize returns, prioritize the performance of your investments before choosing the vehicle (RRSP or non-registered). Performance matters more than tax benefits. Remember, a capital gain is fully taxed as income in an RRSP, whereas it is only 50% taxable in a non-registered account and 0% taxable in a TFSA.

If your profit (total income minus annual expenses) exceeds $20,000, it may be economically beneficial to incorporate. Beyond financial perks, incorporation offers protection for your personal assets and a reduced corporate tax rate. Ask us for details!

It is imperative that you and your spouse use the same accountant. This allows you to maximize pension income splitting, which can save you several thousand dollars per year.

When your status changes (separation or becoming common-law), you must notify the CRA (Form RC65) for GST credits and Revenu Québec (Form 1029.CS.3) for the Solidarity Tax Credit. Prompt notification prevents "sticker shock" from a large bill months later.

If you know someone eligible for the Disability Tax Credit, tell them about the RDSP (Registered Disability Savings Plan). The government provides generous grants ($1,000 to $3,500) and, in some cases, a Canada Disability Savings Bond of up to $1,000 per year.

It is best not to hold dividend-paying U.S. stocks in a TFSA, as foreign withholding tax will be applied at the source. Prioritize Canadian stocks with strong dividends within your TFSA instead.

If your family income is below $40,000 and you have children under 15, ask a financial planner to open an RESP. Even without a personal contribution, you could be eligible for up to $2,000 per child through the Canada Learning Bond.