Investment TAXES for Canadians Explained Pt1: | RRSP vs.TFSA | Canadian Dividends vs. U.S. Dividends

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If you're confused about all the tax implications on Investment income, or worse, this confusion is preventing you from investing in the first place, let me assure you that you're not the only one. Some typical questions are:
How are Canadian Dividends taxed compared to U.S. Dividends?
If I have a Canadian listed ETF that holds U.S stocks do I pay extra taxes?
How does the 15% Withholding tax work on U.S. stocks?
Are Capital gains taxed in an RRSP or TFSA?
I will answer all these questions in this video series and tell you all you need to know about taxes

Starting with dividends. It’s really simple, for any Canadian listed stock, including now while you're talking we insert video of guy and shopping cart of CAD listed stocks. This is 30sec clips that can be shortened . individual companies, reits, etf’s, split funds, investment trusts whatever it is, the dividends are completely tax free. If you have a DRIP turned on in the account, or not, it doesn't matter if it's all tax free money when you get it and when you withdraw it, whenever that may be.
This includes Canadian listed ETFs that hold U.S. stocks

Now you won’t have to worry about paying this tax yourself, the 15% is taken off the top before the dividend even reaches your account, even if you have the DRIP turned on it doesn't matter . I'll show you how it looks like in my personal account right now

in summary , Whatever is in your TFSA, you don’t have to worry about taxes. The only thing that is taxed are the dividends or distributions from U.S. listed stocks. It's 15% and it's taken off the top automatically… nothing you can do about it. Capital gains, no matter how big they are…and even if it's a U.S. listed stock, are all TAX FREE.

RRSP. The number 1 tool for Canadians to build up their retirement nest egg while getting a tax break every year they contribute…
Any RRSP contributions you make will offset any Salary income you make dollar for dollar that year. It's an easy way to get a tax refund every year. So this is more of an account feature and although it is related to taxes, i won’t go into details on that in this video, I will make another video on the RRSP in detail where I will cover the features and benefits so don’t worry.

You need to convert the RRSP into another account called the RRIF account (Registered Retirement Investment Fund).
You can no longer contribute to it
You are required by law to withdraw a certain % of the fund every year. The annual minimum depends on your age and increases as you get older. You can of course take out more money than the minimum if you want, or all of it, just not less than the annual minimum set by the government.

here is the KEY point on rrsp withdrawals:
You will be taxed on the amount you withdraw at your personal tax rate or tax bracket of that year. So of course when you're retired it’s very likely that you will be in a much lower tax bracket right. that's the point, you start withdrawing it then when your tax rate is a lot lower than it is now while you're still working.
This account was designed to supplement our very dismal government pension. That's why the RRSP is so crucial. It’s to have dignity and fun in your old age. It can make the difference between thriving or just surviving.

Now regarding that 15% withholding tax on U.S. Dividends that we discussed earlier, the RRSP is completely exempt from this tax. That's right, there is no 15% tax to pay on U.S. dividends in an RRSP account.
That is simply because it’s considered a “retirement account”. Thank you, to however signed that deal
That is why a big chunk of my RRSP portfolio is made up of U.S. listed funds. BTW, Since i did make significant changes to my RRSP lately i am planning on making an updated video soon, where i will unveil my whole RRSP portfolio, which is completely separate from my main portfolio i already unveiled, so stay tuned.
Since there is the most confusion around that 15% Withholding tax on U.S. dividends we made a nice chart for you that you can download for free.
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