A tax-free savings account is an account that provides tax benefits for saving. Investment income, including capital gains and dividends, earned in a TFSA is not taxed in most cases, even when withdrawn. Tax-Free Savings Accounts (TFSAs) are relatively new. They have introduced just over 10 years ago in 2009. Even though they’ve only been around for a relatively short time they’re already the most used out of the major tax-sheltered accounts. There are over 5.5 million households in Canada that have an active TFSA account.
Mentioned below are some benefits for all Canadians to grow their wealth and save for their financial goals such as a trip to Mexico or a new car by using a Tax-Free Savings Account:
A TFSA is a savings solution that offers you the flexibility to save for a multitude of short-term and long-term goals. It can help you reach your saving goals, and you can withdraw your money when you need it.
Share Contribution Room with a Spouse:
Because TFSA contributions are made with post-tax dollars the government doesn’t care if gift money to your spouse to make contributions to their TFSA. This means you can share a contribution room with your spouse and maximize their tax-sheltered space too.
You pay no tax on any investment income you may earn in your TFSA and you can hold a variety of qualified investments, including cash, stocks, guaranteed investment certificates, and mutual funds. The higher the return potential on your investments, the faster your savings may grow, tax-free.
No Tax upon Death:
Because TFSAs are tax-free there is no tax upon death. This means you can transfer your assets to your children without any impact from taxes.
Call today Lez Gomez the Best Mortgage Agent @ 416-723-1313 to find out more about Tax-free saving account (TFSA) benefits.