The Tax Free Savings Account (TFSA) rules allow you to invest a substantial amount of money in a TFSA. All interest, dividends and capital gains earned in the account are tax-free.
For 2024, $7,000 is added to the amount you can contribute. If you (or a family member) have never contributed to a TFSA, how much contribution room do you have?
TFSA eligibility starts at age 18 and TFSAs started in 2009 (originally at $5,000 per year, now $7,000). Your cumulative TFSA contribution limit as of 2023 is based on your birthdate.
Thus, if you were born before 1992 and have never contributed to a TFSA, you can now put $95,000 into a TFSA to earn tax-free income.
You can withdraw funds from a TFSA at any time with no tax cost, and the amount you withdraw becomes available to re-contribute, but only from the following January 1. If you recontribute too soon, a penalty tax applies.
This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. This publication is not a substitute for obtaining personalized advice.
The information contained herein is general in nature and is based on proposals that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice or an opinion provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, specific circumstances or needs and may require consideration of other factors not described herein.
