Tax Free Savings Account
The best time to plant a tree was 20 years ago. The second best time is now.
It’s never too early to start planning for the future. A Tax Free Savings Account is a great way to save and grow your wealth. We’d like to summarize a few key points on the Tax Free Savings Account.
The 2021 TFSA annual contribution limit is unchanged at $6,000 - the same amount as in 2020 and 2019.
If you don’t use your full contribution limit, it is carried forward to subsequent years.
The TFSA program is available Canadian residents 18 or older. If you were 18 or older in 2009, when the TFSA program first took effect, your total cumulative contribution room is $75,500. Check your CRA Account for your current cumulative contribution room.
Think of a TFSA as a holder for your investments. Investment income, including interest, capital gains, and dividends earned in a TFSA is sheltered from tax.
Funds can be withdrawn from your TFSA. The amounts withdrawn are added back to your contribution room in the next calendar year.
Unlike RRSPs, contributions to a TFSA are not deducted from your taxable income. In essence, TFSAs are funded by “after tax” money.
Although capital gains in a TFSA are tax free, capital losses in turn cannot be used to reduce taxable income.
Consider speaking with a Financial Adviser and the Partners at Evolve about your investments, your financial goals, and tax strategies that work for you.
