TFSA Investors: How to Earn $300 Per Month and Pay No Tax to CRA

Put these six top TSX stocks in your TFSA portfolio, earn $300/month, and pay no tax to CRA! Now is the perfect time to build your dream income stream!

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Right now is a perfect time for Canadian investors to begin maximizing the benefits of a Tax-Free Savings Account (TFSA). Perhaps, during the COVID-19 crisis, you have wondered how you could make your savings work for you. Or maybe you wondered how to build an income stream that supplements (or surpasses) your employment income.

Build your dream income stream in your TFSA

Well, fortunately, today you can begin building your dream income stream. The TSX market crash in March has created some incredible opportunities to buy high-quality stocks that trade with higher-than-average yields.

By owning income stocks within your TFSA, you can earn monthly income and pay no tax to the Canadian Revenue Agency (CRA). In fact, if you were 18 years or older in 2009, you can contribute a cumulative total of $69,500 into your TFSA and start earning investment income 100% tax-free!

Here are six top TSX stocks that are perfect for your TFSA. Invest $10,000 into each, and you could earn, averaged across the year, $300 per month (not all distributions are paid on a monthly basis; some have quarterly payments)!

Trust in Canadian staple stocks for income

BCE just monetized some if its data centres and fetched a pretty nice premium. BCE infrastructure assets (cell towers, cellular spectrum, wireline assets) have significant hidden value, which it may begin to monetize now. While growth is probably limited to around 5-7% per year, the business is well capitalized and very stable. Buy 170 shares today and earn $577 per year in dividends.

Another staple Canadian stock for your TFSA is TD Bank. It is one of Canada’s largest, best-capitalized, and most diversified banks. If any Canadian bank should survive through the COVID-19 crisis, it is TD. The stock is cheap at only 1.24 times price to book and 10 times price to earnings (compared to 12 times last year). Put $10,000 into TD and earn $506 per year in dividends.

High-yielding REITs are perfect for your TFSA

REITs do not qualify for the dividend tax credit, so they are good candidates for your TFSA portfolio. WPT Industrial REIT owns a high-quality logistics and industrial property portfolio in the United States. The stock is going to benefit for a very long time from e-commerce growth in the United States. Buy 830 shares and earn $52.40 every month. This stock is very undervalued, so there is good opportunity for upside from here.

Northwest Healthcare Properties REIT is beginning to show a nice recovery. It has a diversified, high-quality portfolio of private hospitals and healthcare facilities across the world. The company pays a 7.58% yield that is covered by monthly cash flows. Buy 920 shares in your TFSA, lock in that hefty yield, and earn $63.17 per month.

Increase your income from stable energy stocks

Pembina Pipeline operates pipeline and midstream assets. It is essentially a toll road for the Canadian oil industry. 90-95% of its cash flow is contracted and its payout is well covered. As long as oil consistently stays above $30, the quality of its contracts should be safe. If oil normalizes to $40-$50, this stock will likely have some upside. Buy $10,000 in your TFSA today and earn $58.75 per month.

The last stock for your TFSA is Brookfield Renewable Partners. It owns renewable power assets across the world. As ESG/renewable investing grows, demand for this stock could rise. It targets 12-15% total annual returns, which will translate into long-term distribution growth and capital gains. Being a partnership, it doesn’t qualify for the dividend tax credit, so it is a perfect TFSA stock. Gather $456 in annual total distributions by owning 151 shares of this high-quality stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robin Brown owns shares of BCE INC., Brookfield Renewable Partners, PEMBINA PIPELINE CORPORATION, and WPT INDUSTRIAL REIT USD. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS and PEMBINA PIPELINE CORPORATION.

More on Dividend Stocks

edit Back view of hugging couple standing with real estate agent in front of house for sale
Dividend Stocks

Why Real Estate Stocks Are a No-Brainer Addition to Your Portfolio

Real estate stocks, especially REITs, offer some distinct advantages over other types of stocks, making them must-have additions to most…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Top TSX Dividend Stocks to Buy for Monthly Passive Income

Top TSX stocks with monthly dividends now trade at cheap prices for investors seeking passive income.

Read more »

Canadian Dollars
Dividend Stocks

Create Free Passive Income and Turn it Into Thousands With 1 TSX Stock

If you can't afford to invest, you can certainly create passive income another way and use that to invest in…

Read more »

Payday ringed on a calendar
Dividend Stocks

Canadian Dividend Investors: 2 ETFs That Pay Monthly Income With High Yields

Dividend ETFs often pay out monthly distributions compared to dividend stocks.

Read more »

think thought consider
Dividend Stocks

2 Stocks I Own and Will Buy More of if They Fall

Stocks tend to go up in the long run. Therefore, buying a basket of diversified stocks on dips should lead…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy for Passive Income

Blue-chip dividend stocks such as Royal Bank of Canada and Manulife Financial pay investors a tasty forward yield.

Read more »

TFSA and coins
Dividend Stocks

TFSA Passive Income: 3 Solid Stocks to Earn $355 Every Month

Looking to earn steady passive income? Here are three solid TSX stocks that can help you earn a worry-free passive…

Read more »

Technology
Dividend Stocks

RRSP Investors: 2 Stocks to Buy in August for Dividends and Capital Gains

RRSP investors can still find top TSX dividend stocks trading at cheap prices today for a buy-and-hold portfolio.

Read more »