How are investments taxed?
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When thinking about how investments are taxed, the type of account(s) matters. Registered accounts have different tax status than non-registered accounts. Registered accounts include RRSPs, RRIFs, RESPs and TFSAs.
With RRSPs for example, you don’t pay tax on what you earn while your money is in the investment or plan, but certain withdrawals are fully taxed as income. With TFSAs you don’t pay tax on what you earn while your money is in the plan – or when you take it out. All investments held in non-registered accounts are subject to tax. As an investor expect to pay tax on interest-bearing investments, dividend-paying investments, capital gains and foreign investments.
Learn how income tax and RRSP and TFSA contributions work. Speak with a qualified professional for personalized assistance.