Are you investing your hard-earned money in a Tax-Free Savings Account (TFSA)? While it might sound like a haven for tax-free growth, some investments could still lead to hidden costs over time. Let’s dive into how you can make the most of your TFSA and avoid unnecessary withholding taxes.
Withholding taxes may not be on your radar, but they can eat away at your returns. For example, if you own a US-listed ETF in your TFSA, you could face a surprise 15% withholding tax on dividends. That’s right! For every dollar in dividends, you’ll only receive 85 cents!
But don't worry; there are smart strategies to minimize these taxes by carefully choosing where to hold specific ETFs. Generally, US-listed ETFs should shine in your RRSP or non-registered account rather than your TFSA. Understanding these nuances can save you thousands over the years!
Curious about more tips and detailed explanations? Keep reading!
