TFSA

The Tax-Free Savings Account (TFSA) is an exciting innovation in personal savings by the Government of Canada, introduced in 2009.

The TFSA is a unique tax-free savings program which allows you to accumulate more savings to pursue personal projects, tax free.

If you’re a Canadian resident age 18 or older, you can benefit from a savings account that offers the following advantages:

From 2009 to 2012, the annual contribution room was $5,000. In 2013, the limit increased to $5,500. It was the same for 2014. In 2015, the limit was raised to $10,000. In 2016, the TFSA limit went back to $5,500 annually. It was the same for 2017 and 2018. In 2019, the limit rose to $6,000. It was the same for 2020, 2021 and 2022. The annual contribution limit for 2023 has risen to $6,500. With this TFSA dollar limit announcement, the total contribution room available in 2023 is $88,000, for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009, All eligible investors can make deposits in a TFSA, regardless of income.

Any earnings generated (interest, capital gains or dividends) in the TFSA, as well as sums withdrawn, are not taxable.

Unused annual contribution room accumulates indefinitely.

Unused contribution room will be reported on the annual CRA Notice of Assessment.

The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room.

You can withdraw any amount at any time without penalty.

Neither TFSA contributions nor its earnings affect eligibility for the Guaranteed Income Supplement, Old Age Security, the Canada Child Tax Benefit or other government benefits based on income.

A couple can contribute to two TFSAs, even if one of them has no income.