Tag Archives: taxes

How to Make a RRSP Contribution Quickly and Easily Using ING Direct

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If you already bank with ING Direct now Tangerine.ca like we do, you can make a RRSP contribution in under two minutes, including getting your RRSP contribution slip for your income taxes. We used to make contributions at our “Big 5” bank when we were younger. Even though they were fairly quick about it, we still usually had to spend an entire lunch break getting it done. The first time we made a RRSP contribution online with Tangerine ING, I couldn’t believe how quickly and easily we got the job done.

UPDATE: Please be aware that as of January 2015, Tangerine has started charging a fee if you transfer your RRSP or TFSA from Tangerine to another bank, credit union, brokerage or financial institution.

As of the time this was written, in October 2013, ING Direct Tangerine does not charge any fee to transfer all or part of a RRSP to another institution. (Please see: Does It Cost Anything to Transfer Part of my Tangerine RRSP to Another Institution? (You can’t transfer a GIC, though, until it matures.) So we often make our initial contribution to our RSP Investment Savings Account at Tangerine, and then transfer it elsewhere at our leisure.

(Sometimes we just keep it at Tangerine and buy a RSP GIC if they are offering a great rate. Keep an eye out on unusual days like “Cyber Monday” and “Black Friday” if you’re interested in unusual GIC rates.)

Making a Contribution to a RSP Investment Savings Account at Tangerine

Before starting this procedure, check to make sure you still have room to contribute to your RRSP. Remember you’ll have to pay a ridiculous level of tax on any over-contributions.

  • Log in to your Tangerine.ca account.

If You Already Have a RSP Investment Savings Account at Tangerine

  1. From the links on the left side of the screen, click on Move My Money
  2. In the Amount ($): field, type the amount you want to contribute.
  3. From the From: drop-down list choose the account from which you want to fund the RSP Investment Savings Account.
  4. From the To: drop-down list, choose your RSP Investment Savings Account.
    A message will be displayed reminding you to check your available contribution room.
  5. In the When: section, select the radio button beside
    • Now
    • Later; or
    • Ongoing

    I selected Now.

  6. Click on the Go button.
  7. Review the details. If they look ok, click on the Go button.

You’re done!

Copy the confirmation number and information and paste it into a document to save until you’re sure the transaction went through properly.

If You Don’t Already Have a RSP Investment Savings Account

  1. Click on the tab at the top of the screen called Savings.
  2. In the RSP Investment Savings Account section, click on the Open Account button.
  3. Review your name, address, date of birth and social insurance number.
  4. If they are correct, in the Amount: field, type the amount of money you want to contribute to your RRSP.
  5. If desired, type a Nickname for the account. (For example you could type: 2013 first contribution)
  6. In the Fund from this Account: section, from the drop-down list select from which account to take the money.
  7. In the Effective Date field, review the date and change it if needed.
  8. Answer the anti money-laundering and registration questions.
  9. Click on the Next button.
  10. Review all of the information. If it’s correct, to set up and fund the RSP Investment Savings Account, click on the Go button.

You’re done!

Copy the confirmation number and information and paste it into a document to save until you’re sure the transaction went through properly.

To Print Your RRSP Contribution Receipt for your Taxes

Oh crumbs. I forgot that you can’t print the 2013 contribution receipts until January 2014. I’ll have to wait. However, here’s how you would do it then:

  1. From the list of links on the left side of the screen click on the My Documents link.
  2. Click on Tax Receipts.
  3. From the drop-down list, select the year you made the contribution.
    For example, select 2013. (once you can!)
  4. Look for your name under the RSP – RRSP contributions section.
    • If you made the contribution in 2013 after February, it will say (Balance of Year).
    • If you made the contribution before March, it will say (First 60 days)

    Click on your name to open the receipt.

  5. Click to select Open with Adobe Reader, then click OK.
  6. Click on the Printer icon to print your income tax receipt.
  7. Close the document.

If You Have Finished Banking with Tangerine

  • Click on the Log me out link.
    For added security, close your browser session.

Imagine No Lining Up Till Midnight at Your Bank to Make a RRSP Contribution!

The best part about this fast, simple way to contribute is that if you suddenly realize you have a bit more money you can contribute and it’s the last contribution day, usually February 28, you can login and be done in minutes! No more walking to the bank through a snowstorm and waiting in line!

UPDATE: Please be aware that as of January 2015, Tangerine plans to start charging a fee if you transfer your RRSP or TFSA from Tangerine to another bank, credit union, brokerage or financial institution.

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Do you ever use Tangerine as a quick way to make a contribution that you then take the time to move to its final well-planned resting place later? Please share your experiences with a comment.

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Can I Take Stocks Out of my BMO InvestorLine RRIF Without Selling Them?

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At this stage, we’re still adding to our RRSPs each year. But all too soon it will be time to change our RRSPs into RRIFs. And once you have a RRIF whether you want to or not, you have to take some assets out each year and pay tax on them. The federal government sets a minimum withdrawal schedule generally starting at age 72. But what if I don’t want to make my withdrawals in cash? I wanted to know if I could take stocks out of my BMO InvestorLine account without selling them.

Why Would I Want to Transfer Out Stocks from my RRIF?

There isn’t a lot of benefit to making a withdrawal “in kind” from a RRIF. Basically, it saves two trading commissions: one for the sale of the stocks inside the RRIF, and one for re-purchasing the stocks in a non-registered brokerage account outside of the RRIF.
There is one other advantage: it reduces the risk that you might sell for a lower price than you have to pay to re-purchase the same shares.

Because you will pay tax based on the deemed value of the shares on the day you transfer them out (not based on the book value, or the price you paid for the shares when you first invested in them) you will not avoid any tax on the capital gain.

In fact any increase in value is not even considered a capital gain. The entire withdrawal is treated as “income” by the government and unfortunately you pay regular tax on it, not just capital gains tax. You can’t claim any capital losses in a RRIF or when making a sale to make a cash withdrawal from a RRIF either. Sorry.

Why Most People Don’t Transfer Stocks out of Their RRIFs

Most people don’t care if you can transfer stocks out or not. They need cash!

If you need the cash right away, there is no need to transfer the stocks out. It’s only worth transferring the stocks out if you have plenty of cash and you want to keep holding that stock for the long term.

For example, you might need the cash value of those stocks to either
(a) live on or
(b) pay the deferred taxes with.

Remember, when you make a withdrawal from your RRIF you have to pay income taxes on it. Generally, you will have to pay when you file your quarterly or annual tax return.

If you withdraw more than the required annual minimum, you will have to pay a portion of the taxes immediately though as tax is “withheld” and submitted to the CRA by your financial institution.

Checking Whether “In Kind” Transfers Out are Permitted to Meet RRIF Withdrawal Requirements

I used the BMO InvestorLine MyLink secure email system to ask whether it is possible to make a required RRIF annual withdrawal “in kind” rather than in cash.

Specifically, I asked whether stocks could be transferred in kind from a RRIF to a regular non-registered InvestorLine brokerage account in order to meet the mandatory government withdrawal schedule.

Stock Transfers Out of a RRIF Are Permitted at InvestorLine

Good news!

Yes, you can transfer shares directly out from an InvestorLine RRIF into a non-registered InvestorLine brokerage account.

The detailed reply included the following information:
“With InvestorLine, the default option is cash payments. If you would like to setup an in-kind payment, they are done on a manual basis. What you would be required to do is contract us, 2 weeks in advance from the scheduled cash payment, and request an in-kind payment. The agent assisting you will submit the request for in-kind shares to be moved to your non-registered cash account and ensure to cancel the cash payment.

Ensure [that a non-registered cash account] is opened prior to the payment being requested to ensure smooth processing of the minimum in-kind RIF payment.”

So it can be done, but you have to be prepared:

  1. Set up your InvestorLine non-registered account well in advance of your first RRIF withdrawal. (I’d suggest opening it at least 2 months in advance.)
  2. Two weeks (or earlier if they will let you) ahead of transfer time, contact InvestorLine and request the schedule cash payment be cancelled.
    At that time request the in-kind transfer. You will have to specify

    • which shares to move,
    • how many shares to move,
    • and how you will pay the withholding tax required by the government if you are withdrawing more than the required minimum (which is likely as the shares are not likely to divide evenly into your minimum requirement).

Let’s  hope we can all transfer the shares in kind –and hope it’s because we’re all rolling in so much cash we don’t need the money!

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Have you done an in-kind transfer of shares from your RRIF to a brokerage account? Did it go smoothly? Please share your tips or tricks with others facing this same challenge by leaving a comment.