TFSA – Talk to your National Bank Financial Investment Advisor Now!
In its 2008 budget, the Federal government gave Canadians a new savings vehicle: the tax-free Savings Account (TFSA). Compared to the RRSP, contributions to TFSA are not deductible, but all your investment returns in the TFSA compound tax-free, and withdrawals are not taxable.
The TFSA at a Glance :
- Annual contribution room: $5,000 (indexed)
- Minimum Age : 18
- Maximum Age : none
- Contributions : non deductible
- Investment income: compounds tax free
- Withdrawals : not taxable
Contributions can be made to a TFSA as of the beginning of 2009, but you can fill out all the paperwork required to open your account now, and avoid the rush in January. A number of things about the TFSA bear attention and should be taken into account when you plan for the future. For instance, since withdrawals are not taxable, they will not impact your marginal tax bracket, nor your eligibility for means-tested benefits programs such as Old Age Security. The TFSA also offers a good way of splitting income with your spouse or children since there are no attribution rules on money gifted to a family member that is then contributed to a tax-free savings plan.
Your Investment Advisor will help you determine this exciting new tool into your planning and recommend how various securities should be allocated between taxable accounts, your registered retirement plans and the TFSA from a tax perspective.
We invite you to visit our online Document Center and download a PDF version of our TFSA brochure, or ask your Investment Advisor for a copy.
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