TFSA
The TFSA program exist since 2009. This tax-free saving vehicle is a constant in all financial plan. While the contributions are not deductible for income tax purposes, any amount contributed as well as the gains generated by any investment within the TFSA account are tax-free. This is also true for the amounts withdrawn from a TFSA account at any time.
Like we mentioned before, TFSA is an investment vehicle and not an investment itself. What we mean by this, is that within a TFSA account you can find different kind of investments, such as: bonds, stocks, mutual funds, ETFs, GICs, etc. It is completely up to you to decide what type of investment you want to make.
TFSA contribution room
| 2009-2012 limit | $5 000 |
| 2013-2014 limit | $5 500 |
| 2015 limit | $10 000 |
| 2016-2018 | $5 500 |
| 2019-2021 limit | $6 000 |
While there is a contribution limit to a TFSA for each year, any contribution room not used for any given year accumulates for the years to come. This means that if you didn’t contribute to your TFSA at any given year, the contribution room is available for you today. Also, any withdrawal will free up a contribution room by the same amount of said withdrawal the following year. With that being said, one must be very careful with the contribution because an over-contribution to a TFSA account will carry a penalty of 1% of the over-contributed amount, per month.
Contact us if you want to talk about TFSA and investment planning