Category: Tax Tips

Wealthsimple: Tax mini-review

RobHLeave a comment

Ah, Tax Season. No surprise — I do my own taxes. I have been the “tax man” for many years, filling out taxes for me and my spouse, my parents (when they were alive), my mother-in-law…

For many years, I used TurboTax as my go-to software, taking advantage of the annual discount rate offered to CIBC customers. I include this research should any of you (a) bank with CIBC and (b) use TurboTax (which used to be called QuickTax).

Anyway, I don’t use TurboTax anymore. TurboTax had a nasty bug a few tax seasons ago related to Final Returns (I was filling out my late father’s final tax return) and after spending several hours with support, who ultimately admitted there was some bug, advised me to direct a call to the developer line and explain the problem to them — from scratch — I was less than impressed. And this after enduring yet another price increase (usually hidden as “upgrades” to do simple tasks, like add capital gains) I decided to look elsewhere for my tax filing needs.

I think it was a Rob Carrick column1 that advised me that upstart Wealthsimple offered tax software which was free2. As a certified cheapskate, “free” was certainly a price I could get behind. And so I gave it a try a few years ago.

I think Wealthsimple uses Tax as a loss-leader to get you started on their platform. It certainly worked that way for me. I started using just Tax, then added a prepaid Mastercard (no-fee FX), then added an RRSP/RRIF account (to get a new laptop), now a few savings accounts, investment account, Wealthsimple Visa card….

Anyway, you might be dubious about a free product, but it works great. It supports everything you would expect including auto-fill, eFile, saving information across tax years so you don’t have to type excessively, support for joint filing with your spouse…I’ll note that my tax needs are relatively simple: T4s, T5s, T3s, plenty of non-registered stock sales that generate capital gains and losses…Compared to QuickTax, Wealthsimple Tax is a little less user-friendly but a little easier to skip around. It didn’t take long for me to find my way around.

The hidden cost? You have to setup a login with an email address, and this will generate Wealthsimple marketing emails, which may or may not be welcome3. The Recommendations section includes helpful tips aka upsell opportunities like opening a TFSA to avoid paying tax on bank interest. But to me, it’s a fair trade.

  1. Mr. Carrick now has a Substack too. Retirement for him I guess means “doing the same stuff I did before without deadlines”, which is good news for the DIY investor. ↩︎
  2. Wealthsimple added Tax to their lineup back in 2019 with the acquisition of SimpleTax, a product some of you may know…? ↩︎
  3. I do like their Monday newsletter called TLDR. ↩︎

“My parent has more money than they’ll ever need!”

RobHLeave a comment

Disclaimer: I’m not a tax expert, accountant or lawyer. My only expertise comes from being the financial caregiver to my late parents.

Say you’re the financial caregiver for your parent1. And you have come to the realization that they are going to die with a large estate. Maybe they have a good work pension. Maybe they have sold their principal residence and their monthly expenses would take 86 years to eat through the assets. Maybe they have both.

I’m going to make the assumption that your assessment is sound. That your parent does, in fact, have more money that they will need for what is left of their life2. I’ll go one further and make the assumption that your parent isn’t so keen on leaving a big legacy to the CRA. So what should you look out for?

Asset = part of estate = subject to estate tax

Anything of value (property, stocks/ETFs, GICs, art, furniture, cars, cash) owned by the parent at time of death becomes part of the estate, and is therefore subject to the “estate administration tax3” aka “probate tax”. And this money becomes frozen until the courts grant probate, something that takes months, if not years.

One way to dodge some of this probate tax is to name beneficiaries for TFSAs and RRIFs. Assets inside accounts set up this way will not be subject to the estate administration tax, and will not get tied up in probate court. But do be careful — a RRIF that flows to beneficiaries will still attract the same tax time bomb mentioned below, and this has to be taken into account because in my case, no tax was withheld!

RRIFs are a tax time bomb

Recall that RRIFs4 are just RRSPs in reverse: the RRSP is the growth phase, the RRIF is how you shrink it. And recall that RRSP contributions subtract from your taxable income in the year you make them. Did you think the government was going to let you pay no tax forever on that subtracted income? Of course not. That’s why RRIF income is treated as, you guessed it, income in the hands of the RRIF owner, and is taxed the same way as any income5.

Annual RRIF payments can be as large as the RRIF owner likes. Payments above the minimum6 attract witholding tax, which is normal, if you think about it. Taking out more the minimum can allow for some tax avoidance. Why? Taking a small tax hit for a few years is almost certainly preferable to the big tax bomb that happens when a parent dies with a large RRIF remaining. The parent in this situation will be assumed to have taken the entire RRIF as income on the day of death. If the RRIF is large, then you’ll be dealing with tax at the top rates7. By spreading out the RRIF income over a few tax years, you should be able to make the income small enough to avoid the top tax bracket; otherwise you’re not really saving much of anything. That will take some finessing.

Donate shares from non-registered accounts to charity

If there are ETFs or stocks held in non-registered accounts, the tax treatment of donated shares is quite generous. Not only do you get the charitable credit based on the market value of the donated shares, you avoid any capital gains tax. Larger charities accept stock donations, but if they don’t, you can also make use of a service like Canada Helps.

Give money away

Giving money to a charity generates a tax credit, which is good. Giving money to children, friends, relatives, strangers — also good. Gifts are tax-free for the giver and the recipient. Gifting houses or stocks is less good since doing this results in what CRA calls a “deemed disposition” meaning that CRA treats the gift as though your parent had sold the asset first, attracting the usual capital gains.

Of course, to give money away, you either have to have cash on hand, or you have to take it from the RRIF (where it’s treated as income to the parent who owns the RRIF), or you have to take it from non-registered accounts (where you may have to sell assets and attract capital gains), or you have to take it from the TFSA (which is effectively problem-free, other than you can’t put the money back in the same calendar year).

  1. I’m going to make this article simpler by assuming there’s one parent remaining. ↩︎
  2. Getting this wrong would be catastrophic on so many levels. Take care here. ↩︎
  3. In Ontario estates <$50k pay nothing. After that it’s $15 of tax per $1000. ↩︎
  4. I covered RRIFs over here. ↩︎
  5. Yeah, ok, you can split RRIF income with your spouse and this can help you avoid higher tax brackets. In my case, my spouse and I have RRIFs that are about the same size, and therefore generate about the same annual income. ↩︎
  6. The mimimum is calculated at the start of the year based on the size of the RRIF and the age of the RRIF owner. ↩︎
  7. in Ontario, in 2026, you hit the top rate of 53.53% for income over $258,482 per https://www.taxtips.ca/taxrates/on.htm ↩︎

Top Five Money Engineer posts of 2025

RobHLeave a comment

The Money Engineer launched in January 2025 and according to the WordPress stats, I made 144 posts last year. What were the most viewed posts of 2025?

5th-ranked post of 2025: ZGRO versus ZGRO.T

ZGRO versus ZGRO.T: what’s the difference?

I got wind of ZGRO.T through Reddit, specifically r/CanadianInvestor. ZGRO and ZGRO.T are both all-in-one asset allocation ETFs from BMO, but with vastly different yield characteristics. I was confused, but in the end, decided that ZGRO.T was probably not a bad pick for use in a RRIF account as it might save you the hassle of selling shares. Their TOTAL returns (assuming all dividends are invested) are effectively identical.

4th-ranked post of 2025: Spousal RRIF Attribution Rules

Caution! Spousal RRSP/RRIF Attribution Rules

I think I was first warned about this nuance of spousal RRSPs/RRIFs by my DIY neighbour (thanks, Steve) and is the main reason I’m only drawing RRIF minimum for the next two years1. I think most of the visits to this article were search-driven. Either that, or people came to admire what might be my favourite article thumbnail2 I’ve posted thus far.

3rd-ranked post of 2025: Norbert’s Gambit with Questrade

Questrade Example: Exchanging USD/CAD with Norbert’s Gambit

As someone who holds more USD-denominated assets than might be wise, I do very much appreciate the existence of a cheapskate way of converting between USD and CAD assets. I think I first learned about this trick via The Loonie Doctor’s blog. The #3 blog entry explains how it works if Questrade is your broker. I would also recommend https://moneyengineer.ca/2025/08/21/tracking-norberts-gambit-costs-with-questrade/ for a very clear picture of what it actually costs (in time and fees) to execute the Gambit: in three of four instances, the time delay of executing the gambit has worked in my favor as the FX rate has drifted a bit to my advantage.

2nd-ranked post of 2025: TD versus iShares all-in-ones

TD versus iShares: XEQT/XGRO/XBAL versus TEQT/TGRO/TBAL

I’m a fan of all-in-ones (and am a little sad https://moneyengineer.ca/2025/01/21/why-you-can-fire-your-advisor-asset-allocation-etfs/ didn’t crack the top five last year). I am genuinely puzzled why people seem to get so wound up about which family of all-in-ones to choose3. I examined TD’s only because their cost to own is a bit cheaper than iShares (who I use primarily), and I’m a cheapskate. (I studied the cost of owning an all-in-one here.) Anyway, in the end, the biggest difference is visible in TGRO versus XGRO because TGRO, unlike any other GRO ETF, uses 10% bond allocation and not 20%. This gooses its return a bit, at the cost of additional volatility. Otherwise, it’s a case of tomato/tomahto. Pick one, or pick them all, it doesn’t matter much.

Top ranked post of 2025: Mini-Review of Optiml.ca

Mini-Review: Optiml.ca

This was, as the title implied, a quick review of a made-in-Canada tool to help craft a retirement plan. And again, my DIY neighbour gave me a heads-up about it4. It got a lot of interest, probably because the kind folks at Optiml linked to my review from their website ;-). I was impressed by the completeness of the tool during my test drive, and it seems like a good and fairly priced way for a DIYer to do some validation of their retirement plan. Having validation of my plan was one of the ways I knew I could retire.

Looking forward to seeing what the 2026 list might look like! Got a topic or question? Send it along to comments@moneyengineer.ca, or comment below!

  1. RRIF minimum withdrawals are never subject to spousal attribution ↩︎
  2. Courtesy Pexels free photos, built into WordPress’ editor. ↩︎
  3. iShares, TD, BMO, Vanguard, Global X…. ↩︎
  4. Thinking he should write his own blog, maybe. ↩︎

Quick Tip: Tax Loss Harvest by December 30!

RobHLeave a comment

Tax loss harvesting is the strategy whereby assets in non-registered accounts are sold to generate a capital loss1. These losses can be used to offset capital gains, either this year, in previous years (up to three years back), or in future years (forever)2.

Since CRA uses the settlement date of your asset sale, and since most (all ?) brokers take a day to settle a trade, this means to get your capital loss in fiscal 2025 you have to sell by December 30 to settle on December 31, the last business day of 2025.

  1. After the current buoyant year in the markets, there’s probably not too many examples of this, but if you bought bonds in 2022…. ↩︎
  2. All this and more detailed over at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/capital-losses-deductions.html ↩︎