Tangerine | Financial Crooks

As tax-filing time approaches, I’ve started rounding up my tax slips including my T5s for our savings and chequing bank accounts with EQ, Oaken, PC Financial, Tangerine and Zag Bank.

Use Caution Saving Electronic (and Paper) Copies of Your Tax Slips Including T5s

Be sure to keep your electronic copies in a secured location—they have valuable information such as your name, address and SIN number which could be used for identity theft!

How to Get and Print Your T5 Tax Form for Your EQ Bank Savings Account

Sign in to your EQ Bank accounts.
From the drop-down list under the Accounts tab, click on: Tax documents
From the drop-down list under Select the tax document you want to generate, choose the T5 for the year of interest.
For example, I selected 2016 – T5 to complete my income tax return by April 2017.
Click on the Generate document button.
Wait a few seconds to a minute or two.
The T5 will be displayed on your screen.
Click on the Print or save button.
When you are finished, near the bottom of the screen, click on the Back to tax documents button.

Interesting, no where do I seem to get a choice to save the T5 to my hard drive!

According to their online chat, I can only save the T5 if I use Google Chrome. I have no intention of using that program, so I will just scan and save my hard copy printout.

How to Get Your T5 Tax Forms for Your Oaken Financial Bank Accounts

Oaken Financial mails out its tax forms. So you’ll have to check your letter mail for your T5s and other tax forms.

How to Get Your T5 Tax Forms for Your PC Financial Bank Accounts

President’s Choice Financial mails out its tax forms. So you’ll have to check your letter mail for your T5s and other tax forms.

How to Get and Print Your T5 Tax Forms for Your Tangerine Bank Accounts

Sign in to your Tangerine account/s.
From the list on the left side of the screen, select My documents.
Click on the link Tax receipts.
From the drop-down box, select the year for which you wish the documents.
It’s probably easiest to leave the selections “All account types” and “All receipts” so that you don’t miss a slip unless you are looking for something specific.
From the list of PDF files of receipts, click on the one you want to print or save first.
A popup window will let you choose to Open the PDF file or to save it.
If desired, select Open and then print the file; or
If desired, select Save and choose a destination to save the file. Be sure to keep your electronic copies in a secured location—they have valuable information such as your name, address and SIN number which could be used for identity theft!

NOTE: Tangerine combines the interest from your chequing and savings accounts onto a single T5 if the amount is $50 or more. You have to manually report any interest earned below $50 even if you did not receive a tax slip.

How to Get and Print Your T5 Tax Forms for Your Zag Bank Accounts

Sign in to your Zag Bank account/s.
Click on the Accounts tab.
Click on the Statements link.
From the Document Type: drop-down list, click on Year-End Tax Forms & Statements
From the Tax Year: drop-down list, select the year of interest.
From the Tax Forms: drop-down list, select T5, or just click on the View button.

Hmmm. I got an error message: The system is unavailable. Please try again later.
So no luck so far!

It’s probable that an error message is displayed because I had less than $50 of interest on my account and that there is no T5 for this account. In which case, I’ll have a LONG wait….

Aren’t Income Taxes Fun?

So now I’ve found the T5s for my bank accounts that earned more than $50 last year in interest, and I’ve added up the amounts I earned in interest for accounts that earned less than $50, I am one step closer to filing my income tax return for 2016. Oh joy!

Related Reading

How to Get Your RRSP Tax Slip for a Tangerine Account

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Do you have a check list of all the T slips you need before you file your taxes? Have you ever missed a slip? Please share your tax stories with a comment.

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I mentioned in a previous article that I think most people need a $5000 (or more) cash emergency fund. If someone has no other savings, they may as well keep that $5000 in a TFSA daily interest savings account. Once they have more money saved than they can contribute to their Tax Free Savings Account, they should consider keeping the emergency fund cash in a regular daily interest savings account and use the TFSA room to invest for longer term goals. Here are a few options for how someone might want to start investing using their TFSA.

When Will I Recommend My Teens Use Their TFSA Room to Invest?

My children are not eligible for TFSAs yet. You have to be 18 (19 in at least one province) to have any TFSA contribution room.

When my eldest child turns 18, I’ll suggest that first they put the maximum contribution amount for their first year into their TFSA in a daily interest savings account. Right now, that maximum contribution is $5500 per year although it might be slightly higher due to inflation when they turn 18.

The second year, though, I’ll be recommending something else. I’ll be recommending that they invest some of their money in their TFSA.

Using a TFSA to Invest for “The Future”

I think that everyone needs to save for their future. As someone who is closer to retirement than to starting out, I am very, very, very glad I started saving for my retirement as soon as I graduated from university. Those savings have really grown since.

Now many people will balk at saving for retirement in their 20s (or teens!). Fine. It doesn’t *have* to be for retirement. Consider it as saving vaguely “for the future.” Maybe it will be for a wedding, an unexpected very important choice, a home, or early retirement at, say, 40. Any of those things will be easier with savings. So don’t get too worried about labeling exactly for what the money is to be used. Just save it!

I read The Wealthy Barber before the year 2000, and I agree with one of its suggestions: you need to save by “paying yourself first.” You need to save 10-20% of every dollar you bring home from work and do it so automatically it’s as if you never got paid that money.

If at all possible (and it is not always possible) you need to cut your expenses enough that you can save your chosen 10-20%. You may need to choose a cheaper apartment, or even need to share a room in a one-bedroom apartment. If that sounds horrible, do whatever you legally and pleasantly can to earn a higher income so that the 80-90% of your income you have to spend will allow you to rent a better place.

Save that 10-20% in your TFSA. And invest it for the longer-term future.

Using a TFSA to Invest for Life’s Luxuries

In my teen child’s second year, at age 19, I’ll be recommending they think about their savings and their salary in two ways: There is money needed to pay the bills and there is money for the luxury of extra things. For example, if you have $10 000 a year, you may need $9500 of that for bills and you may save $500 of that for a vacation. If the $9500 is money that is needed to survive, you shouldn’t risk any of it. Save it in a daily interest savings account or cashable GICs or something similar.

But the $500 is different. It’s great to have a vacation or buy a cool electronic device. It’s also not the end of (your) world if you can’t. So the money you can invest and take a bit of risk with is your “luxury” money.

If you are willing to risk losing your luxury money in order to watch it grow more quickly, if you’re lucky and the fates allow, then you can invest your luxury money inside your TFSA too.

In the Beginning, How Should I Invest in my Tax Free Savings Account?

Ok, so now my teen has 10% of their income and a bit of savings dedicated to “luxury” purchases that they’d like to invest in a TFSA. What can they do?

(I’m assuming that the combination of the two is less than their available TFSA contribution room. If they get $5500 of room a year, they likely can invest all of their future and luxury savings within their TFSA.)

My Teenager Hates Handling Finances and Making Decisions

One of my children looks like they will be the type of person who hates managing money and fiddling with banking issues.

I’d suggest that child invest their long term and luxury savings in a TFSA at Tangerine. I’d suggest they buy units in the Tangerine Balanced Fund that best suits those long term goals (and their risk tolerance.)

Why?

The Tangerine Balanced Funds offer a “couch potato” style of investing. Because there is no fee to buy new units in the fund. So each pay cheque they can contribute a small amount to their TFSA and buy units.
Because Tangerine will “re-balance” their savings to keep it split appropriately. If my teen bought units in 3 separate funds, for instance the very low fee e-funds from TD, they would have to keep track of the value of their total investments in each of the 3 funds. Once a year, they would have to either aggressively buy more units in whichever funds were less than their target percentage, or would have to sell some units of whichever fund they had too much invested in so that they could buy units in the other two funds. It requires more patience and a tiny bit more work. Paying Tangerine a higher fee means you don’t have to do this.

What Does a Tangerine Balanced Fund or Couch Potato Fund Mean?

When you invest, you need to decide what your preferred asset allocation looks like.

Maybe it’s

25% Canadian stock market index-mirroring equities
25% USA market
25% world markets
and 25% bonds.

With Tangerine, and some other places, you pick the Fund that holds its investments in those percentages and you buy units of that one Fund.

You then just wait and watch the fund value go up and down over time.

In theory over a long period of time, like 10 years, you should see that your investments have grown about 7% a year. (It may grow 2%, 59%, 1% and 25% in some years and shrink 2%, 15%, 1% and 22% other years. What matters is whether after 10 years you have almost twice as much money as you started with, not what the value is at the end of each day or year.)

Buying units in a fund like this intended to:

Avoid having to guess which stocks will earn you the most money over time
Keep you well diversified by buying essentially small amounts of all of the stocks listed on the world’s major stock exchanges
Avoid having to guess in which part of the world stock values will go up the most
Encourage you NOT to panic and sell your holdings just because they drop in value, even if they drop 50% in value; you have to leave them alone and give them time to “re-bound” or return to their previous value

What If I Don’t Want to Invest In the Tangerine Balanced Funds in my TFSA?

Fair enough. Lots of people don’t.

One even lower-cost (but slightly more work) alternative is to open a self-directed online investing account with TD. You can read about investing in TD e-funds, which have very low fees, at the Canadian Couch Potato website.

Another way to keep costs low is to buy units of ETFs instead of mutual funds. Most banks and brokerages charge you for each ETF purchase and sale, however, which may mean you have to save up and invest only once or twice a year. Some brokerages, like Scotia iTrade, allow you to purchase some but not all ETFs for no fee. You’d have to check if you like what they offer. Another discount brokerage, Questrade, lets you buy ETFs for no fee, but there have been some issues in the past with their customer service that leaves me unwilling to recommend using their brokerage.

You can buy mutual funds from almost any bank or credit union. Be very, very, very careful of the fees though. I have yet to read any where of any of them that charge lower or equivalent fees to Tangerine or to the TD e-funds. Personally, I don’t recommend bank mutual funds to anyone.

You can invest in individual stocks. That’s another option that is worth seriously considering for a certain type of investor. I’ll write about it in another article.