RRSP Weekly Tip - Would You Lend Your Money For Free?

Getting a tax refund is exciting! However, what you're really doing is providing the government with an interest-free loan.

When you get a tax refund, it means that you've paid too much tax. Here's what you could do to pay less tax during the calendar year:

Complete and submit CRA form T1213 (Request to Reduce Tax Deductions at Source)
Check the box requesting a reduction in the amount of tax withheld on your salary
You might even want to make this request if you are anticipating a large bonus or vacation pay and prefer not to have the large amount of tax withheld
Indicate which regular deductions and non-refundable tax credits you qualify for. These would include things like regular RRSP contributions, childcare expenses, etc.
When approved by the CRA, you will see more money on every pay

Use the additional cash flow for monthly contributions to your RRSP or supporting an RRSP or investment loan. Get your money working for you.

Talk to your financial advisor to find out more.

Weekly Tips

What to do with your tax refund - March 1^st, 2010
RRSP vs. Mortgage - February 22^nd, 2010
Preparing to retire abroad. What do you need to know - February 15^th, 2010
Rule of 72 - February 8^th, 2010
This Year's Deadline - February 1^st, 2010
I'd rather be cleaning the garage - January 25^th, 2010
How inflation affects Investments - January 18^th, 2010
Benefits to RRSPs - January 4^th, 2010
What is your excuse for not contributing to your RRSP? - December 28^th, 2009
Should I consider an RRSP Loan - December 21^st, 2009
RSP Loans - less tax, better retirement - December 14^th, 2009
Retire Ready - Dec 7^th, 2009
RRSP Fast Facts - November 30^th, 2009
What's Your Retirement Exit - November 23^th, 2009

*Source: Globe and Mail, February 10, 2009

This information does not constitute legal, tax or other professional advice. Information is believed to be accurate, but accuracy is not guaranteed. Equitable Life does not act as lender on RRSP loans. There are inherent risks in using borrowed money to invest. Readers are advised to seek professional counsel from a financial advisor prior to commencing any investment strategy. Any amount that is allocated to a segregated fund is invested at the risk of the contractholder and may increase or decrease in value. Investors do not purchase units of the funds but, rather, an individual variable insurance contract. ® Denotes a trademark of The Equitable Life Insurance Company of Canada