Tax-Free Savings Accounts (TFSA) – 2010 Tax Tips

  • Beginning in 2009, ever Canadian over 18 can open a TFSA.
  • Up to $5,000.00 can be deposited annually.
  • Contributions to a TSFA will not be deductible for income tax purposes but investment income, including interest, dividends and capital gains earned in a TFSA will not be taxed, even when withdrawn.
  • Unused TFSA contribution room can be carried forward to future years.  (If you didn’t open an account in 2009, you can contribute $10,000 in 2010)
  • You can withdraw funds from the TFSA at any time for any purpose.
  • The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room.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 or credits.
  • Contributions to a spouse’s TFSA will be allowed and TFSA assets can be transferred to a spouse upon death.

Note: Consider estate planning matters before opening an account.

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