We wanted to discuss a few quick facts about the Tax-Free Savings Account (TFSA).
The annual TFSA dollar limit for the year 2019 is $6,000.
Q) Can I take advantage of TFSA?
A) TFSA is available to all Canadians, 18 years and older.
Q) What is the main benefit of having a TFSA versus a regular savings account?
A) Any interest, dividends and capital gains earned in a TFSA are not subject to tax;
Q) Where do I put my money once it is under TFSA account?
A) You can put your money into a wide range of investments, including high-interest savings accounts, mutual funds, guaranteed investment certificates, listed securities, or other types of qualified investment products.
Q) How much can I put in my TFSA?
A) You can find out your unused TFSA contribution via to one of the following services:
- CRA My Account
- MyCRA
- through the automated Tax Information Phone Service (T.I.P.S.) at 1.800.267.6999.
Q) Can I withdraw and deposit funds in TFSA as I please?
A) Funds available in your TFSA can be withdrawn tax-free at any time for any purpose. You can re-contribute withdrawn amounts in the same year only if you have unused TFSA contribution room. Otherwise, you have to wait until the following year.
Q) Is there anything else I should know about TFSA?
A) There are many aspects of TFSA program. One of the key features of TFSA is that the Income earned in a TFSA and withdrawals do not affect your eligibility for federal income-tested benefits and credits. Also, attribution rules do not apply for funds gifted to a spouse for the purpose of the spouse’s TFSA contribution.
We encourage you to make the maximum contribution to your TFSA as a tax-efficient way to save for the future.
Should you have any questions regarding this or any other CRA related matters, please do not hesitate to contact us and book a consultation today.
