Danish, one thing to note is the examples you shared only apply to scenarios with Fully dividend income in low tax bracket. For example of earning $110k into wealthsimple calculator in Ontario: if you plug 100k employment income + 10k capital gains, then total tax is $28,056 if you plug 100k employment income + 10k eligible dividends, then total tax is $28,294 You are actually paying more tax on dividend income than regular capital gains.
I thought your explanations were very useful, and made a complicated subject as clear as could be. I particularly enjoyed the graphic at the end showing tax paid from various types of income at $50K and $100K. One thing missing from that chart is withdrawals from a RIF and RRSP. I know they are 100% taxable, but would they be the same result as Interest income, or salary or ... ? Would you know how to calculate the %? I would also note that wealth simple's calculator does not include that type of income in their calculator.
Thank you for your positive feedback! I’m glad you found the explanations helpful. RRIF and RRSP withdrawals are fully taxable, similar to interest income. However, they differ from employment income in terms of deductions and tax treatment
This isn't really a tax benefit and is only designed to account for taxes already paid at the corporate level on those earnings... Ergo, to not be taxed twice. You shouldn't perpetuate the misconception that this is a tax benefit or tax break.
I agree with you there. In fact, the dividend tax credit never fully compensates the corporate tax rate (the split being around 3% depending on your province). So that difference is lost compared to if you had invested in a dividend paying corporation situated in a jurisdiction without corporate tax
Thank you for your kind words. I appreciate your feedback. 😊 I'm happy to hear that you found the information helpful. Dividend taxes can be confusing, but they are important to understand if you want to optimize your income and savings. If you have any questions or suggestions for future videos, please let me know. I'd love to hear from you. And don't forget to like, share, and subscribe to my channel for more videos on tax and financial topics. Thanks for watching. 👍
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Danish, one thing to note is the examples you shared only apply to scenarios with Fully dividend income in low tax bracket.
For example of earning $110k into wealthsimple calculator in Ontario:
if you plug 100k employment income + 10k capital gains, then total tax is $28,056
if you plug 100k employment income + 10k eligible dividends, then total tax is $28,294
You are actually paying more tax on dividend income than regular capital gains.
Great video, I finally have the answer as to how ineligible dividends are taxed in Canada, Thank you
Glad it was helpful!
Great information. Thanks.
Glad it was helpful!
great explanation
I thought your explanations were very useful, and made a complicated subject as clear as could be. I particularly enjoyed the graphic at the end showing tax paid from various types of income at $50K and $100K. One thing missing from that chart is withdrawals from a RIF and RRSP. I know they are 100% taxable, but would they be the same result as Interest income, or salary or ... ? Would you know how to calculate the %? I would also note that wealth simple's calculator does not include that type of income in their calculator.
Thank you for your positive feedback! I’m glad you found the explanations helpful. RRIF and RRSP withdrawals are fully taxable, similar to interest income. However, they differ from employment income in terms of deductions and tax treatment
Just a question. If you invest in dividend stock portfolio from a bank, are the dividends eligible for the dividend tax credits?
It’s not so much were or what broker you use to invest but that the stocks you invest in are eligible, ie Canadian companies
Great question, feel free to reach out on the matter here: asqme.com/@DanishGhaziCPA
i input the calculator when eligible dividend over 130K capital gain is more favour do you know why?
THANK YOU SOOOOO MUCH!
Great video
Glad you enjoyed it
Hi Danish. I have tax and setting up offshore trust related questions. How can I email you? Please share. Thank you and keep up the good work.
Feel free to reach out on the matter here: asqme.com/@DanishGhaziCPA
This isn't really a tax benefit and is only designed to account for taxes already paid at the corporate level on those earnings... Ergo, to not be taxed twice.
You shouldn't perpetuate the misconception that this is a tax benefit or tax break.
Paying less personal tax on eligble dividends is defintely a benefit but to each their own
I agree with you there. In fact, the dividend tax credit never fully compensates the corporate tax rate (the split being around 3% depending on your province). So that difference is lost compared to if you had invested in a dividend paying corporation situated in a jurisdiction without corporate tax
Why are you making it sound so complicated ???
Very helpful information, thank you very much.
Thank you for your kind words. I appreciate your feedback. 😊
I'm happy to hear that you found the information helpful. Dividend taxes can be confusing, but they are important to understand if you want to optimize your income and savings.
If you have any questions or suggestions for future videos, please let me know. I'd love to hear from you. And don't forget to like, share, and subscribe to my channel for more videos on tax and financial topics. Thanks for watching. 👍
I know that this calculation is just a senario but do you know that how much you have to invest to make 50k as eligible Dividends? 12:33
Thanks
Roughly about 1.2 million
Your video is really helpful. Thank you
Glad to hear that!
TAX the CORPoRATIONS .❤❤❤
Corporate profits are taxed, bucko.
you're taxing the shareholders by taxing the corporation. the corporation pays nothing.