This year, just for a change, I waited until April 30 to submit my taxes. My wife and I both had almost no income other than from dividends. I had heard before that a person can earn about $30,000 of dividend income before owing any taxes. But I had to see it first hand before I could really understand it.

This means that a couple can each earn about $30,000 or together earn $60,000 and not owe taxes. This is really nice for a couple to plan for in retirement. At the same time, there are some drawbacks. First, the dividend are earned in a taxable account, meaning that it doesn’t help if all your investments are in RRSPs. Second, the investments need to be evenly split between the two individuals to minimize taxes owing. Third, income is grossed up before getting a dividend tax credit, so although no tax is owing, Benito’s such as OAS, GIS and any other income-tested benefits may be clawed back or unavailable.

Still, I’m not complaining. I’m far too young to qualify for OAS anyway.

Dividend income

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