|Effective September 09, 2010|
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Tax-Free Savings Account Helper
The government introduced Tax-Free Savings Account (TFSA) is available to Canadians aged 18 and older to save money in a tax-free plan.
- Investment income earned in a TFSA plan, including capital gains, will not be taxed, even when withdrawn.
- Unused TFSA contribution room can be carried forward to future years.
- There is no maximum age limit to open or hold a TFSA.
- There's no deadline for your contributions.
How much can I contribute to my TFSA in a year?
- From 2009-2012, you could contribute up to $5,000 a year. Starting in 2013, you can contribute up to $5500, plus you can use any contribution room carried over from previous years. And even though we know you'd hate to bank any where else, you'll need to include any contributions you may have made at other financial institutions in that total.
- If you make a withdrawal from your TFSA during the year and you have already contributed the maximum, don't contribute again until the following year. If you do over-contribute, you'll be penalized by the Canada Revenue Agency.
Find out more about TFSA contribution room on the Canada Revenue Agency's website.
What types of investments can I hold in my TFSA plan?
Coast Capital Savings customers will be able to hold a wide range of investments in their TFSA plan such as savings accounts, term deposits and mutual funds.
What's the difference between a TFSA and an RRSP?
|Do contributions reduce your taxable income?||No||Yes|
|Are these funds subject to income tax when withdrawn?||No||Yes|
|Is interest earned on these investments tax sheltered?||Yes||Yes|
|Can these funds be withdrawn anytime, for any reason, without being taxed?||Yes||No|
Still can't decide between a TFSA and an RRSP? We can help.
Want to know more about TFSAs?
Coast Capital Savings provides advice and service related to deposit, loan and mortgage products. Worldsource Financial Management Inc. provides mutual fund products and services.