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

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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.

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• All withdrawals are added to your contribution room, yet you can only pay back the withdrawn amount in the following year/years but not within the same calendar year of withdrawal. 

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