TFSA (Tax Free Savings Account)
The Tax Free Savings Account (TFSA) is an account that provides tax benefits for saving in Canada. Investment income, including capital gains and dividends earned in a TFSA are not taxed, even when withdrawn. It is available to Canadian residents 18 years of age and older, have a valid Canadian Social Insurance number and are a resident of Canada.
Starting in 2009, TFSA contribution room accumulates every year. These are the annual contribution amounts for the following years:
The annual TFSA dollar limit for the years 2009, 2010, 2011 and 2012 was $5,000.
The annual TFSA dollar limit for the years 2013 and 2014 was $5,500.
The annual TFSA dollar limit for 2015 was $10,000.
The annual TFSA dollar limit for 2016, 2017 and 2018 is $5500.
Since the inception of the Tax Free Savings Account in 2009, one significant benefit in the design of the TFSA is the carry-over aspect. Any unused space under the annual cap can be carried forward to subsequent years, to the maximum contribution entitlement of the account-holder.