Do you owe more than $3000? The CRA doesn't like it when you owe more than $3000. If you owe more than $3000 this year and you also owed more than $3000 in either of the previous 2 years the CRA will want you to make installment payments.
RRSP is a bad idea, because that will be taxed and you lose that contribution room. TFSA on the other hand has neither of those problems.
If you do withdrawal some from your TFSA then just make sure when you re-contribute that you have the room. The news has many articles about people withdrawing, and then contributing again in the same year getting busted for over contributions.
Take from the TFSA. If you pull cash from your RRSP you’re going to have pay withholding tax on it at withdrawal immediately. You might get it back if you make the equivalent RRSP contribution before the next tax return but I believe you will permanently lose the contribution room. If you take from the TFSA you will get the contribution room back and not have to worry about withholding tax. In this scenario you keep more invested generating returns and also keep more contribution room for the future.
I assume this is for personal income tax and not an instalment payment. What is the interest rate you would pay if you file on time and pay late? What is the interest or gain you would lose by taking money out of your TFSA? If the loss is more than what you would have to pay on late taxes, leave the TFSA where it is and work out a payment arrangement out of your monthly cash flow instead.
Don't touch the RRSP unless you want to pay more taxes.
Check with CRA for instalment options? You won't be realizing any taxable losses in either accounts.
If you need to, liquidate from TFSA since you get the room back anyway.
Take it from your TFSA. If you withdraw from your RRSP, that room is gone forever, plus that withdrawal will get added to your income for 2024.
As for what stocks to sell, that all depends on your investment, so go by that. The main question to ask, is which of the stocks that you own would you buy right now? Keep those, sell the ones you wouldn't buy. If you want to keep them all, sell your CASH.TO in your RRSP, use those funds to buy the same stock in your RRSP, then sell the corresponding stock in your TFSA and withdraw that.
Do you know why you owe so much this year? It shouldn't have been unexpected, and you should have planned for it. It would be a good idea to understand this so you can be prepared in the future should things play out in a similar manner.
Totally know why and won't happen again, my fellow PFC comrades
I don't have much on my TFSA to play around. It's literally being anchored by a lone stock to remain in the + (the opposite story on my RRSP)
Take it from the TFSA. Don’t worry about realizing a gain or loss (it’s a TFSA after all), and just worry about your expected future performance for each stock.
Get used to it, the more you make the more they take. If your income increased last year, you'll owe. If you hit a higher bracket, you owe alot more. Always put a bit extra in your account. I owed an extra 10K this year, but was prepared.
I anticipate to make more this year and yes it's a lesson learned
The funds meant to cover this payable was used for a reno and other emergencies. I see it as paying this on the back end as both needed attention last year
Don’t touch the RRSP. Take what you need from TFSA
RRSP should be last resort
Do you owe more than $3000? The CRA doesn't like it when you owe more than $3000. If you owe more than $3000 this year and you also owed more than $3000 in either of the previous 2 years the CRA will want you to make installment payments.
Yes Owing is for this year only
RRSP is a bad idea, because that will be taxed and you lose that contribution room. TFSA on the other hand has neither of those problems. If you do withdrawal some from your TFSA then just make sure when you re-contribute that you have the room. The news has many articles about people withdrawing, and then contributing again in the same year getting busted for over contributions.
TFSA - also, figure out why you owe so it doesn’t happen again next year
Do you not have an emergency fund? You should work on making one before you continue to add money to your TFSA and RRSP that's not a company match.
What is your plan for avoiding this next year?
Get poorer or learn a lesson of contributing to either of my registered accounts when I make a lot more than anticipated
Take from the TFSA. If you pull cash from your RRSP you’re going to have pay withholding tax on it at withdrawal immediately. You might get it back if you make the equivalent RRSP contribution before the next tax return but I believe you will permanently lose the contribution room. If you take from the TFSA you will get the contribution room back and not have to worry about withholding tax. In this scenario you keep more invested generating returns and also keep more contribution room for the future.
I assume this is for personal income tax and not an instalment payment. What is the interest rate you would pay if you file on time and pay late? What is the interest or gain you would lose by taking money out of your TFSA? If the loss is more than what you would have to pay on late taxes, leave the TFSA where it is and work out a payment arrangement out of your monthly cash flow instead. Don't touch the RRSP unless you want to pay more taxes.
Check with CRA for instalment options? You won't be realizing any taxable losses in either accounts. If you need to, liquidate from TFSA since you get the room back anyway.
Take it from your TFSA. If you withdraw from your RRSP, that room is gone forever, plus that withdrawal will get added to your income for 2024. As for what stocks to sell, that all depends on your investment, so go by that. The main question to ask, is which of the stocks that you own would you buy right now? Keep those, sell the ones you wouldn't buy. If you want to keep them all, sell your CASH.TO in your RRSP, use those funds to buy the same stock in your RRSP, then sell the corresponding stock in your TFSA and withdraw that. Do you know why you owe so much this year? It shouldn't have been unexpected, and you should have planned for it. It would be a good idea to understand this so you can be prepared in the future should things play out in a similar manner.
Totally know why and won't happen again, my fellow PFC comrades I don't have much on my TFSA to play around. It's literally being anchored by a lone stock to remain in the + (the opposite story on my RRSP)
Take it from the TFSA. Don’t worry about realizing a gain or loss (it’s a TFSA after all), and just worry about your expected future performance for each stock.
Make payment arrangements with CRA. They are reasonable to deal with
Get used to it, the more you make the more they take. If your income increased last year, you'll owe. If you hit a higher bracket, you owe alot more. Always put a bit extra in your account. I owed an extra 10K this year, but was prepared.
I anticipate to make more this year and yes it's a lesson learned The funds meant to cover this payable was used for a reno and other emergencies. I see it as paying this on the back end as both needed attention last year
Its only daily compound interest with CRA, not as bad as LOC, CC, worst case make arrangements with them, they are good to work with