You can invest and withdraw as much as you want in a non-registered account. You will only pay taxes on income generated by your investment. There are three different kinds of income to know about.
Dividends are profits that a company shares with its investors. If you own stock in a company that pays dividends, you earn a certain amount of money for each share of the company that you own.
Interest is money paid regularly at a particular rate as compensation for lending company money (i.e. buying bonds). In the case of your Moka account, interest may be paid out from bonds and money market securities.
Capital gain is the profit you make from selling the holdings in your account. You may see a capital gain or loss following a withdrawal or change of investment model in your Moka account, as in either case, investments may be sold in your account.
There is no penalty for withdrawing from a non-registered investment account, however, please remember you will be taxed on any capital gain arising from this withdrawal. How exactly does that work? Let’s say you deposit $100 in your account. Your money is invested and grows to $105. If you decide to withdraw that $105, you would be taxed on the $5 you made from selling your investment, but only 50% of capital gains count as income.
If you don’t have a non-registered account with Moka, then you have an RRSP or a TFSA. These accounts are registered investment accounts, which means they were set up by the government to provide certain tax advantages as incentives to save and invest. There is a limit to how much you can contribute to TFSAs and RRSPs and there is a different kind of penalty for withdrawing from either account.
For further questions about filing your taxes, we strongly suggest you consult a government website or a licensed tax professional.