Stop paying excessive taxes on dividends in Canadian brokerage accounts
Most of investors in Canada will hold stocks or ETF listed in US exchanges, and many of those stocks or ETFs pay dividends. Given the (overall) low expected returns on equity, the 2%-3% dividends on broad indices provide non-trivial contribution to the total return. This article is about optimizing the dividend treatment in your Canadian portfolio. In the ideal world, investors will receive the full dividend sent from stock or ETF / CEF ownership. Unfortunately for Canadian investors, this never happens when investing in non-Canadian (U.S.) instruments in the Canadian brokerage accounts. Probably the most annoying tax is the US foreign dividend tax. By default, the U.S/ taxman deducts 30% of dividends paid to an "alien", for example, on your SPY positions - they are sent directly to IRS. Fortunately, Canada has a tax treaty with U.S., which limits the withholding tax to 15%, but to get that lower rate, a Canadian investor must file the form FW8FEN: https://www.irs.gov/pub...