Tax-Free Savings Account (TFSA)
The Tax-Free Savings Account (TFSA), launched by the Federal Government on January 1, 2009, offers an array of tax benefits to help you invest throughout your life. It's been described as the single most important personal investment vehicle since the introduction of Registered Retirement Savings Plans (RRSP) back in 1957.
Flexible Investment and Tax Treatment
Like an RRSP, qualifying investments for your TFSA include: cash, GICs, mutual funds, publicly traded securities, government and corporate bonds. Contributions to a TFSA are not deductible for tax purposes, however, interest and investment income, including capital gains, earned in a TFSA is not taxable, even when withdrawn.
Talk to your Raymond James Financial Advisor
Raymond James offers a variety of investment options for your TFSA. Your Raymond James Advisor can help in getting your application completed and help you determine the appropriate investment options based on your needs.
Tax-Free Savings Account Highlights
- Starting in 2009, Canadian residents age 18 (in most provinces) or older are eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward.
- Contributions are not deductible.
- Capital gains and other investment income earned in a TFSA will not be taxed.
- Withdrawals are tax-free.
- Neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
- Withdrawals will create contribution room for future savings. However, re-contributing in the same year may result in an over-contribution amount which would be subject to a penalty tax.
- Contributions to a spouse's or common-law partner's TFSA are permitted, and TFSA assets are transferable to the TFSA of a spouse or common-law partner upon death.
- Qualified investments include all arm's-length RRSP qualified investments.
- The $5,000 annual contribution limit will be indexed to inflation in $500 increments.