Financial Planning -> Tax-Free Savings Accounts (TFSAs)
Income Tax Act S. 146.2, 207.01 to 207.07
Tax-free savings accounts are available for Canadian residents who are 18 years of age or older. The first tax year that they were available was 2009. However, a brokerage account for a TFSA cannot necessarily be opened by an 18 year old - a brokerage account can only be opened by someone who has reached the age of majority in their province or territory.
There is no deadline for contributions to a TFSA, as the unused contribution room is carried forward into the next year. However, a withdrawal in any year increases the TFSA room in the following calendar year. Thus, if you are thinking of making a withdrawal close to year end, make sure it is done by December 31st, in order to have the withdrawal amount added back to the TFSA room sooner.
In a tax-free savings account:
On October 16, 2009 the Minister of Finance announced amendments to the Income Tax Act to strengthen the rules applicable to Tax-Free Savings Accounts. The amendments apply to transactions which occur after October 16, 2009. The draft legislation and explanatory notes were released by the Department of Finance on April 30, 2010. The amendments were included in Bill C-47, which became law in December 2010. These amendments:
Information on the changes is included in our TFSA articles below.
- Don't Overcontribute! <- very important!!! Read this so you know how it works.
- TFSA Investments - qualified, non-qualified, and prohibited
- TFSA vs RRSP Calculator - to help you decide which type of account is better for you.
- Canada Revenue Agency
- Tax-free savings accounts (Archived)
- RC4466 - Tax-Free Savings Account (TFSA), Guide for Individuals - lots of detailed information, and examples.
- Department of Finance
- Budget 2008 tax-free savings account information
- Legislative proposals and explanatory notes re new Income Tax Act legislation on the TFSA:
- March , 2008 - initial legislation included in Bill C-50, which became law on June 18, 2008
- July 14, 2008 - revisions to the initial legislation
Tax Tips: Everyone should
have a tax-free savings account!
Revised: February 23, 2019
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