The Tax-Free Direct Savings Account is a brand new savings opportunity available to Canadians as of January 1, 2009. Make yearly contributions up to $5000 and all the income earned on those funds is yours to keep absolutely tax-free.
How do Tax-Free Savings Accounts work?
Making contributions
- You will be able to contribute up to $5,000 per year into your Tax-Free Savings Account ( this amount may increase in the future to take inflation into account).
- This $5,000 per year limit is in addition to any RRSP contribution limit you may have.
- Unused contribution room will be carried forward indefinitely.
- Unlike an RRSP, any money you contribute to a Tax-Free Savings Account will not be tax-deductible.
While the funds are in the Tax-Free Savings Account (TFSA)
- Any income or capital gains earned in the Tax-Free Savings Account will not be taxed.
- Most investments that can currently be held in an RRSP will also be allowable in a Tax-Free Savings Account. Eligible investments may include certain savings accounts, GICs, stocks, bonds and other investment products.
Making withdrawals
- You will be able to withdraw funds at any time, for any reason.
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The withdrawal will not be subject to income tax.
- The amount withdrawn from a Tax Free Savings Account can be put back at a later date, without reducing your contribution room.
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So I'm openning one TFSA for me and one for my wife. We're gonna transfer shares of NOT for a $5000 value each. Example : $5,000 of NOT at $0.50 is 10,000 shares. When NOT will go back to $5, that's gonna make : $50,000. That's a capital gain of $45,000 TAX-FREE that you can withdraw anytime you want to by a house or whatever you like. So the TFSA (CELI in french) is a powerfull tool to make money if your lucky enough and have the guts to invest in a big share price potential gain company. And by the way, I'm seeing NOT been a multiple of $10 so can you imagine the amount of money we're gonna save because of this great tool. THANK YOU M. FLAHERTY !
I was pissed like all of you that our NOT are not at $5 like it use to be and when the Canadian goverment annonced the TFSA for the beginning of 2009, I didn't saw the potential then (my NOT share were above $5) but now with NOT at $0.58/share, I'm really hoping the share price will stay low till january so I can transfert my NOT shares in my TFSA.
Manic
