Tax-Free Savings Account (TFSA)
A practical addition to your client's savings portfolio
The tax-free savings account (TFSA) is a registered savings plan for retirement or any other project like a trip, a new car, renovations or a down payment on a house.
Who can contribute to a TFSA?
Canadians aged 18 and over can contribute to a TFSA, whether they receive a salary or not.
Advantages of an TFSA for your clients
- The returns on investment in a TFSA are tax-free.
- The amount of unused contribution room may be carried over to subsequent years.
- Withdrawals are not taxable, whether before or after retirement.
- Withdrawals may be made at any time. Redemption fees may apply.
How does the TFSA work?
- The maximum contribution amount to a TFSA is $6,000 per person since 2019. Your clients may also use the Canada Revenue Agency's Tax Information Phone Service to find out their TFSA contribution ceiling.
- Your client may not deduct his TFSA contributions in his income tax return.
- The amounts withdrawn from the TFSA are added to the maximum annual contribution amount.
The Canadian Governement's Tax-free savings account website explains the TFSA in more detail.
You can use their calculator to evaluate the performance of your client's TFSA.
- Flyer: The TFSA - the plan that completes your savings portfolio (PDF, 343 kB)
- Brochure: The TFSA - a practical addition to your client's savings portfolio (PDF, 340 kB)
- TFSA or RRSP? (PDF, 77 kB)
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