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How the Tax-Free Savings Account Will Work ; f! c# a# S+ c e" ]: c
Starting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward. / b! E- a/ l3 m5 ^7 r
Contributions will not be deductible. # s: I4 a. g1 v" R
Capital gains and other investment income earned in a TFSA will not be taxed. I% b1 g$ A- K: W: P. k7 H
Withdrawals will be tax-free. 6 u5 A1 q4 C. {/ Y
Neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
J0 r* q5 H. l) b GWithdrawals will create contribution room for future savings.
% `9 `; i2 |1 a9 ^" A2 j, M( `Contributions to a spouse’s or common-law partner’s TFSA will be allowed, and TFSA assets will be transferable to the TFSA of a spouse or common-law partner upon death. - n- ~8 S8 Q3 q& X' ^9 O7 r3 h& W
Qualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
+ Q4 q; R8 Y7 o* _The $5,000 annual contribution limit will be indexed to inflation in $500 increments. |
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