Tax-Free Savings Account
The Tax-Free Savings Account (TFSA) is one of the most tax-efficient ways to build your investment. TFSA is an account and not an investment by itself. Your advisor can help you choose the right investment options in accordance to your goals, investment objectives, and risk level that you can afford to take. Managing investments is crucial for the growth of your investments and your success.
TFSA was introduced by the Government of Canada in 2009
TFSA program began in 2009. It is a way for individuals who are 18 and older and who have a valid social insurance number to set money aside tax-free throughout their lifetime. Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn.
TFSA Lifetime Limit
One of the great qualities of TFSA is how much money you can deposit, especially if you’ve never contributed before. If you’re contributing in 2021 for the first time, you’re eligible to deposit $75,500 provided you`ve been over 18 years since 2009.
Be aware of these rules and restrictions:
You can contribute up to your TFSA contribution room. A tax applies to all contributions exceeding your TFSA contribution room
Withdrawals will be added to your TFSA contribution room at the beginning of the following year
You can replace the amount of the withdrawal in the same year only if you have an available TFSA contribution room
Direct transfers must be completed by your financial institution
To find out how we can help you fit with your financial and tax-efficient investment planning, contact our qualified Brilliance Financial Advisor today.