Tax-Free Savings Account
A Tax-Free Savings Account is a great way to save money for a short term goal or to augment your retirement savings plans.
How it works:
- Beginning in 2009, Canadians aged 18 and older can save up to $5,000 every year in a TFSA. TFSA contribution limit for 2013 has been increased to $5,500.
- 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for income tax purposes, but investment income, including capital gains, earned in a TFSA will not be taxed, even when withdrawn.
- Unused TFSA contribution room can be carried forward to future years.
- TFSA Holder may withdraw funds at any time; withdrawals may be restricted by investment terms.
- The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room.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.
How do I know how much I can contribute to a TFSA?
Your TFSA contribution room information can be found by going to one of the following services available through the Canada Revenue Agency:
You should keep records about your TFSA transactions to ensure that you do not exceed your TFSA contribution room. The Canada Revenue Agency will also keep track of your contribution room and determine the balance of room at a particular time for each eligible individual based on information reported annually by yourself and the TFSA issuers.
For more information, please contact TeleService, visit your local branch or visit the Canada Revenue Agency website.