What is a Tax Free Savings Account?A Tax-Free Savings Account (TFSA) is a flexible investment account, where your investment income – whether you’re earning interest, dividends, or capital gains – are not taxed, even when withdrawn. This means that your money has a chance to grow quicker than in a traditional taxable account, helping you reach your goals faster!
How much can I invest?The annual contribution limit is $10,000 for 2015, and $5,000 for each year from 2009 to 2014. This annual limit will rise along with inflation in future years, in $500 increments.In 2015, the TFSA limit briefly rose to $10,000 before being lowered to the previous rate of $5,500 on January 1, 2016.
In addition, you can carry forward unused contribution room indefinitely. The federal government will report your TFSA contribution room to you annually.
There is no tax deduction for contributing to a TFSA. However, the returns your investments generate (interest, dividends or capital gains) are not taxable (except for any foreign tax on foreign investments).
In addition, your withdrawals are tax-free.
Who is eligible?Any Canadian resident age 18 or older with a Social Insurance Number can open a Tax-Free Savings Account.
You are not required to have earned income to contribute to a Tax-Free Savings Account.
Note: The age of majority is 19 for residents of Newfoundland and Labrador, New Brunswick, Nova Scotia, British Columbia, Northwest Territories, Yukon and Nunavut, which may delay the opening of a TFSA. However, the accumulation of contribution room will start at age 18.
Contact us today to discuss your TFSA options at 519-744-3020 or email email@example.com