A Very Simple Tax Free Savings Concept
  • Starting in 2009, Canadians aged 18 and older can save up to $5,000 every year in a TFSA. Contribution limits will be indexed to inflation every year and rounded to the nearest $500.
  • Contributions to a TFSA will not be deductible for income tax purposes but investment income, including capital gains, earned in a TFSA will not be taxed, even when withdrawn. So, contributions are made from after-tax dollars.
  • Unused TFSA contribution room can be carried forward to future years.
  • You can withdraw funds from the TFSA at any time for any purpose. The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room.
  • Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits.
  • Contributions to a spouse’s TFSA will be allowed and TFSA assets can be transferred to a spouse upon death.
  • Contributions in excess of TFSA limits will be subject to a penalty tax of 1% per month.

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