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Tax-Free Savings Account 

A TFSA is a registered savings plan that enables you to earn investment income tax-free within the account.

Contribution Features:

  • Accounts can be opened for those 18 years and over.

  • Maximum annual contributions: (Cumulative year to date $81,500)

    • 2023                                    C$ 6,500

    • From 2019 to 2022             C$ 6,000

    • From 2016 to 2018             C$ 5,500

    • Increased in  2015             C$10,000

    • From 2013 to 2014             C$ 5,500

    • From 2009 to 2012             C$ 5,000 

  • Unused contribution room can be carried forward indefinitely.

  • Note that contributions are not tax deductible.

  • Contributions in-kind from your investment account to the TFSA account might have a tax impact.

    • If the contributed asset is in a capital gain position, you will have to realize the gain.

    • If the contributed asset is in a loss position, you will not be able to claim the loss on your tax return.

  • 2023 Cumulative TFSA limit is now $88,000. But to get access to that total limit, the client must have been a resident of Canada and at least 18 years of age since 2009.

Withdrawal Features:

  • Any withdrawals from a TFSA are not taxable as the investments grow tax-free within the account.

  • All withdrawals are added to your contribution room, yet you can only pay back the withdrawn amount in the following year/years but not within the same calendar year of withdrawal. 

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