Tax-Free Savings Account (TFSA)
Building Wealth Tax-Free
A Tax-Free Savings Account (TFSA) is a simple investment option designed to help you save money. It lets you save your after-tax income and pay no further taxes on those funds or their investment returns.
WHAT ARE THE FEATURES OF A TFSA?
YOU SHOULD THINK OF A TFSA IF:
- You’ve maxed out your RRSP
- You need a down payment for a home or vehicle (a TFSA withdrawal doesn’t have to be repaid)
- You want a vacation
- You just want to put some money on the side
- You need access to your savings before retirement
- You’re retired and you need a tax-free place to save
- You’re a low-income senior
- Since tax-free TFSA withdrawals won’t be added to your income, they won’t trigger any reductions in Old Age Security benefits or the Guaranteed Income Supplement.
- You’re married or have a common-law partner
- TFSA holders can name their spouse as a beneficiary and roll the proceeds over to them upon their death and spouses can contribute to their partner’s TFSA. This means couples can shelter up to $11,000 worth of new investments every year from tax.
- You want to receive dividends from foreign investments, as there is no foreign content limit on a TFSA
HOW MUCH CAN YOU CONTRIBUTE?
Please consult your Notice Of Assessment or call the Canada Revenue Agency (CRA) at 1-800-959-8281 to find out your personal TFSA contribution limit. Unused contributions from previous years can be carried over and past withdrawals can be re-contributed in the following year.