Tax-Free Savings Account

As the most recent addition to Canadian investment vehicles, TFSAs were created in 2009 as a way for Canadians to accumulate savings and earn tax-free investment income. Residents of Canada (age 18 and older) with a valid SIN.

Features

  • TFSA contributions are not tax-deductable.
  • Investment income and withdrawals are tax-sheltered.
  • Like RRSPs, unused contribution room can be carried forward and used in future years.
  • Type of investment fund is your choice, with options ranging from Segregated Investment Funds to Guaranteed Investment Certificates (GICs).

Over-contributions

Over-contributions to your TFSA are subject to a 1% tax on the highest excess amount per month.

Example: (if you have a limit of $5000 in the given year)

January contribution: $3,000
February contribution: $1,500
March contribution: $1,000

In this case, an excess contribution of $500 was made in March.

Tax = 1% * $500* 10 months (March - December) = $50

In this particular case, $50 of taxes would have to be paid.

Location

Alliance Financial Group
200 Consumers Road, Suite 700, Toronto, ON M2J 4R4 Canada

Contact

Local: 416-490-1974
Toll Free: 1-877-490-1974

Office Hours

Mon-Fri 9am-5pm
Sat-Sun closed