What is TFSA? (Tax-Free Savings Account)
- Posted by Sanjeev Kamra
- On February 14, 2011
- 0 Comments
In 2009, the Federal Government introduced the Tax-Free Savings Account (TFSA), describing it as “the single most important personal savings vehicle since the introduction of the Registered Retirement Savings Plan (RRSP).”
The TFSA undoubtedly allows you to set money aside in eligible investment vehicles and to watch your savings grow tax-free throughout your lifetime, they also help you to find the best insurances like the i4mt. TFSA savings can be used for any purpose — to purchase a new car, to purchase the best 360 camera 2017, read the survival cooking and take a camping vacation, renovate a house as flooring with a guide on how to tile an uneven surface, or even start a small business. Also, Canadians of all income levels and from all walks of life can reap the benefits.
This summary gives you an idea how the TFSA works:
- Since 2009, any Canadian resident aged 18 and older can save up to $5,000 every year in a TFSA.
- Your contributions to a TFSA are not deductible for income tax purposes but the investment income, including capital gains, earned in your TFSA is not taxed, even when withdrawn, youcan call Tax Express to get more information about it.
- Your unused TFSA contribution room is carried forward and accumulates for future years.
- You can withdraw funds available in your TFSA at any time for any purpose — and the full amount of withdrawals can be put back into your TFSA in future years.
- Neither income earned in a TFSA, nor withdrawals, affect your eligibility for federal income-tested benefits and credits.
- You can provide funds to your spouse or common-law partner to invest in their TFSA.
- TFSA assets can generally be transferred to a spouse or common-law partner upon death.
- On the breakdown of a marriage or common-law partnership, any amount may be transferred directly from the TFSA of one party to the TFSA of the other.
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