Tax Free Savings Account

Tax Free Savings Account '' TFSA" will become available in January 01, 2009

Tax Free Savings Account . . . ? for a lifetime of savings . . . free from taxes . . .

TFSA contributions are made from after tax dollars, withdrawals are tax free at anytime for any purpose

The amount withdrawn can be put back in, at a later date without reducing your contribution room.

Contributions to a spouse’s TFSA will be allowed and TFSA assets can be transferred to a spouse upon death

Canadians aged 18 and older can save up to $5,000 every year

Interest, investment income including capital gains, are tax-free, even when withdrawn.

The difference between RRSP and TFSA as highlight below:

Contributions to an RRSP are deductible and reduce your income for tax purposes, whereas,
your TFSA savings will not be deductible.

Withdrawals from an RRSP are added to your income and taxed at current tax rates, whereas, your TFSA withdrawals and growth within your account will not be tax

Tax Free Savings Account are tax-free savings, so take advantage of it asap