TFSA

Great benefits of opening an TFSA

A TFSA can be an effective way to save for the future, even for those who are only able to save a little every year, as your savings will grow more quickly due to the fact that you do not pay any tax on the earnings. Here are some reasons to help you decide whether it would be financially beneficial for you to open a TFSA:

  • If you are looking for a flexible way to save, a TFSA could be a good option as it allows you to carry forward any unused contributions to subsequent years. In addition, you are able to credit any withdrawals that you have made back into the TFSA to enable you to benefit from the maximum savings potential.
  • You may already be investing the maximum amount possible into an RRSP. In this case, investing money into a TFSA allows you to draw income from it when you retire, without paying any tax on the withdrawals.
  • You should bear in mind that you have already paid tax on the funds that you invest into your TFSA. Therefore, if you expect that your tax rate will have increased by the time that you withdraw your funds, you will have paid fewer taxes in total. Remember that the opposite applies for your investment in a RRSP.
  • A TFSA offers you the option of keeping investments that would usually be subject to a higher rate of tax sheltered, as you do not pay tax on the earnings.
  • If you are on a low income and therefore receive money from government schemes such as the Canada Child Tax Benefit, your TFSA will not affect the amount of benefit that you receive.
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Latest News

2024 Federal Budget Highlights

On April 16, 2024, Canada's Deputy Prime Minister and Finance Minister, Chrystia Freeland, presented the federal budget. While there are no changes to federal personal or corporate tax rates, the budget introduces: • An increase in the portion of capital gains subject to tax, rising from 50% to 66.67%, starting June 25, 2024. However, individual gains up to $250,000 annually will retain the 50% rate. • The lifetime exemption limit for capital gains has been raised to $1.25 million. Additionally, a new one-third inclusion rate is set for up to $2 million in capital gains for entrepreneurs. • The budget confirms the alternative minimum tax changes planned for January 1, 2024 but lessens their impact on charitable contributions. • This year's budget emphasizes making housing more affordable. It provides incentives for building rental properties specifically designed for long-term tenants. • Introduces new support measures to aid people buying their first homes. • Costs for specific patents and tech equipment and software can now be written off immediately. • Canada carbon rebate for small business

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