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TFSAs

Growing up, our Father often told us, "Whenever the government gives you an incentive to do something, always be weary".  For the most part he was right but even he agrees that the TFSA's are a vehicle without any major downfall that can be useful to every Canadian.

Unfortunately, many Canadians are still confused about what they are and exactly how they work.  At Twin Power Financial, we can help you utilise this vehicle to maximize your portfolio and keep more money in your pocket instead of the governments. 

 

Individuals aged 18 and older can contribute up to $5,500 every year to a Tax-Free Savings Account (TFSA).  The current maximum space in a TFSA allowed is $31,000 per individual assuming they have been 18 and over since the beggining of the program.

Some highlights of TFSA accounts:

  • Contributions to a TFSA will not be deductible for income tax purposes, but investment income, including capital gains, earned in a TFSA will not be taxed, even when withdrawn.
  • Unused TFSA contribution room can be carried forward to future years.
  • You can withdraw funds from the TFSA at any time, for any purpose. 
  • The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room. 
  • Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits. 
  • Contributions to a spouse’s TFSA will be allowed, and TFSA assets can be transferred to a spouse upon death.

Please note that while both TFSAs and RRSPs are tax-advantaged investment vehicles, there are important differences:

  • Contributions to an RRSP are deductible and reduce your income for tax purposes. In contrast, your TFSA savings will not be deductible. 
  • Withdrawals from an RRSP are added to your income and taxed at current rates. Your TFSA withdrawals and growth within your account will be tax-free

Contact us to find out how Twin Power Financial can help you utilize this amazing vehicle for you!

Links

Below is a list of all investments vehicles we can help you utilise to get the most out of your money.  Please click on the links below to find out more information about what Twin Power Financial can do for you.