The Tax Free Savings Account is available to Canadian residents age 18 or older. You can contribute up to $5,000 annually to a TFSA. Investment income earned in the TFSA is tax-free. Withdrawals are also tax-free. If you do not use the full $5,000 each year then the unused contribution is carried forward and accumulates for future years.

The amount you withdraw one year from the TFSA can be put back into the TFSA in future years. You can not use the contributions as tax-deductible.

The income you earn from the TFSA does not affect your eligibiity requirements for Old Age Security (OAS), Guaranteed Income Supplement (GIS) or the Canada Child Tax Benefit.

Funds can be given to a spouse or common-law partner to invest in their own TFSA. The assets in a TFSA can be transferred to the common-law partner or spouse at time of death.

Talk to your accountant, agent or broker as to how best take advantage of this new program.

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