Tax Free Savings

YOUR High Interest Tax Free Savings Account is now available!

Community Credit Union members now have a new way to save money with the new Tax-Free Savings Account (TFSA). You can save or invest money without paying tax on the income it earns and you can also withdraw it tax free. Canadians now have flexible account options for a lifetime of savings needs.

The TFSA was introduced by the Government of Canada in Budget 2008 and passed by legislation on June 18, 2008.

Here's how it works:

Contribution Limit:
  • In 2015, the maximum TFSA contribution limit increased to $10,000.
  • Under proposed legislation, starting January 1, 2016, the annual TFSA dollar limit for 2016 will decrease from $10,000 to $5,500.00. The TFSA annual room limit will be indexed to inflation and rounded to the nearest $500.
  • Contributions are not tax deductible                                                                   

TFSA Unused Contribution Room

  • Unused contribution room will accumulate each year.
  • Unused contribtion room is carried forward indefinitely, allowing the Holder to catch up by contribution more than the maximum contribution limit in a future year.
  • A TFSA withdrawal will increase the contribution room for the year after withdrawal. As a result, when amounts are withdrawn from a TFSA they can be re-contributed in the future when funds become available.
  • Canada Revenue Agency can confirm your contribution room. The CRA recommends TFSA holders take advantage of their online service option My Account to obtain the most up-to-date information about their TFSA transactions and available TFSA Contribution Room. Any changes to the holder's TFSAs are uploaded daily as the TFSA information from TFSA issuers is received and processed.
  • In addition to the My Account section of the CRA website, the following are additional resources available to TFSA holders in obtaining confirmation of their TFSA Contribution Room:

Tax free savings: Returns on your investments are tax-free including interest and income earned in your Tax Free Savings Account. Just note that contributions are not tax deductible.

Withdrawals:  You can take money out of your Tax Free Savings Account and you won't be taxed on these withdrawals. The amount you withdraw also becomes available as part of your contribution room the following year.

Qualified Investments
Generally, the types of investments that will be permitted in a TFSA are the same as those permitted in a registered retirement savings plan (RRSP). This would include:

  • cash
  • mutual funds
  • securities listed on a designated stock exchange
  • guaranteed investment certificates (GICs)
  • bonds
  • certain shares of small business corporations.

Where can I find more information?

 
 

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