Ottawa, January 1, 2010
Archived - Tax-Free Savings Accounts Provide Canadians With More Room to Save in 2010
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The Honourable Jim Flaherty, Minister of Finance, today reminded Canadians that with the new year, they will have an additional $5,000 in room for contributions to their Tax-Free Savings Account (TFSA).
"Canadians can benefit by using the TFSA to start saving early for a range of needs they may have in the future," said Minister Flaherty. "The TFSA also provides seniors with a vehicle to meet ongoing savings needs."
The TFSA is a general-purpose tax-efficient savings vehicle for Canadians that complements existing registered savings plans. It is a flexible savings account that allows Canadians to earn tax-free investment income to more easily meet their savings goals.
Contributions to a TFSA are not deductible, but the income earned within a TFSA and withdrawals from the account are not taxed. They also have no effect on eligibility for federal income-tested benefits and tax credits, such as Old Age Security and the Guaranteed Income Supplement, the Canada Child Tax Benefit and the Goods and Services Tax Credit.
A TFSA can contain different types of investments, similar to those in a Registered Retirement Savings Plan, such as mutual funds, listed securities and guaranteed investment certificates.
Other important information that Canadians should know about how the TFSA works includes:
- Since 2009, Canadian residents age 18 or older are eligible to contribute up to $5,000 annually to a TFSA, with unused room carried forward.
- Withdrawals create contribution room for future savings.
- Contributions to a spouse’s or common-law partner’s TFSA are allowed, and TFSA assets are generally transferable to the TFSA of a spouse or common-law partner upon death.
For more information on TFSAs, please visit www.tfsa.gc.ca.
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
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