This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Splurge Vs. Save? TD Shares Tips To Help Canadians Get The Most Out Of Their Tax Returns

Stocks in this article: TD

TORONTO, April 11, 2013 /CNW/ - With the tax return deadline approaching on April 30, some Canadians may already be happily receiving refunds, while others are disappointed because they have to pay. Regardless of your situation, there are investing decisions that you can make to help reduce the overall amount of tax you have to pay.

For many Canadians, tax season means a lump sum of money: according to the Canada Revenue Agency, the average refund in 2011 was $1,580. The amount of tax paid annually by Canadians depends on several factors, including income, place of residence and deductions.

"Many Canadians think of a tax refund as a bonus, even though it's your own money to begin with," says Cynthia Caskey, Vice President, Sales Manager & Portfolio Manager, TD Wealth Private Investment Advice. "It can be tempting to splurge on luxury items, but many Canadians need to balance paying debt, saving for a child's education, and for retirement. It's important to consider these needs when deciding how best to spend your refund."

For Canadians who are eager to spend their refunds, Caskey offers the following suggestions:

  1. Pay down high-interest debt: This can include outstanding credit card balances, and should be your top priority.  Consider making a lump-sum payment, especially if the interest on the debt is not tax deductible.
  2. Save for a child's education: You can contribute to a child's Registered Education Savings Plan (RESP), which will also potentially qualify them for a Canada Education Savings Grant (CESG).  The plan will earn tax-free investment income on both your contribution and any government grants. Grandparents may consider opening a family RESP plan, which can have multiple children as beneficiaries.
  3. Create a flexible savings strategy: A contribution to a Tax-Free Savings Account (TFSA) can be part of your retirement savings strategy, and interest earned and investment income is not taxed. Because you can withdraw the funds at any time, it is a great option for use as an emergency fund. A good rule of thumb is to have at least six months of living expenses set aside for contingencies.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs