Is it fair to say "filling some holes" is what got you in debt to begin with? 

<--- Small Business owner.

My return is never under 3k. I get to deduct so much.

Do you have a TFSA yet?

If not, friggin' get one.

If you don't know what it is, learn. And friggin' get one.

This will replace RRSPs for our generation.

Imagine this.

You turn 18. That day you become eligible to get a bank account, to which you can contribute up to $5000 per year (indexed to inflation), where any money made within that account is completely non-taxable. In that account you can hold stocks, bonds, mutual funds, GICs, etc.

As soon as the next tax year hits, you can contribute another 5000. And so on into eternity.

At any point you can withdraw any or all of what's in there, tax free, including earnings form interest or capital gains. You can replace all of that as soon as the next year hits. As long as you follow those rules you don't pay tax on any of it. Any money kept within the account can continute to work for you tax free.

That's a Tax Free Savings Account. I'm up to $15,000 in maximum contributions now, having gotten one when it first came out. I've actually only contributed $12,000 so far; I really must get around to topping up this year's contribution. The net of my investments within that account has made me $2800 which I'll never have to pay tax on, and which I can continue to hold, or to sell and reinvest within that acount, again tax free. And that $2800 is after I already had one investment absolutely tank on me before I bailed out and got into something significantly better.

There are some people who from the outset invested their first $5k, picked the right stock, had it climb meteorically to $50k, and sold. They now have $50,000 in non taxable investments, and it can continue climbing from there. With three years since inception, that's $15,000 in initial contributions that people have been able to make grow without being subject to interest or capital gains tax. In another 7 years I'll have a contribution room of somewhere in excess of $50,000 that I can invest and never pay taxes on, nor on anything those investments make for me.

This thing is an unbelievably powerful investment vehicle if you use it carefully. And it's Canadian. There's no reason any Canadian of our generation can't work our asses off, max out our contributions in this, and retire rather comfortably indeed.

It could be most easily compared to a Roth IRA in that investments are post-tax and that distributions are tax free, however an IRA requires you tol hold it until I think 59 1/2 years of age.

We already have an account similar to a traditional IRA. This new one, the TFSA, has no age restriction. I can take my money out whenever I want, the only restriction being I must wait til the next calendar year to re-contribute it. I can invest my money and make considerable returns off it within this account and never pay tax on it, since the cash that went in was already taxed. And I on't have to wait til I'm too old to have fun or be awesome to use the money.

The individual mandate was recently ruled unconstitutional in a couple of cases. I suspect the Supreme Court will uphold that. Hopefully you'll see your money back.

 

I thought the fines weren't being levied until 2014, and not in full effect until 2016?

 

Fortunately the federal law has an opt out for financial / religious purposes

 

That sucks though. Thank god for Texas...I pretty much just have to breathe and pay taxes. Breathing being optional.

So you still have to pay the tax on the earnings. In my case I don't. Even with a 50% tax preference on capital gains, that's still a tremendous potential tax savings over time.

I know.

Here in Canada, capital gains are taxed as income, except that they're only taxed at half the normal rate. Still, with a lucky stock that can be very considerable, since the gains themselves may push you into a much higher income bracket for that year.