Toronto, Canada, January 11, 2016 – Paul Babber & Associates (www. pbaltd.ca), a premier accounting and tax consultation firm in the Greater Toronto Area (GTA), is warning Canadians to be cautious about one part of their Tax-Free Savings Accounts (TFSA) that is not entirely tax-free. The costs arise when Canadian investors attempt to diversify their TFSA by incorporating dividend stocks from the United States. (Source: Jackson, D., “The TFSA isn’t always tax free,” Business News Network, December 21, 2015;
https://www.bnn.ca/News/2015/12/21/The-TFSA-isnt-always-tax-free.aspx.)
"The IRS [Internal Revenue Service] takes 30% of any U.S dividends," explains Paul Babber, the CEO and president of Paul Babber & Associates. "This happens regardless of whether the investor is an American citizen or resident."
Due to a tax...
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