Tax Free Savings Account
December 17th, 2012
The Tax-Free Savings Account (TFSA) allows Canadians, age 18 and over, to set money aside tax-free throughout their lifetime. Each calender year since the inception in 2009 you were able to contribute up to $5,000 each year. So if you haven’t contributed to date, you can contribute any unused TFSA contribution room from the previous years. As well, if you haven withdrawn amounts from your TFSA, withdrawals will be added to your TFSA contribution room at the beginning of the following year.
Please note the following change! Commencing in January 2013, the annual TFSA dollar limit is $5,500! Remember that all income earned and withdrawals from a TFSA are generally tax-free. Plus having a TFSA does not impact federal benefits and credits. It’s a great way to save for short and long-term goals.