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Posts Tagged ‘Tax Free Savings Account’

The TFSA vs. the US Roth IRA

May 19th, 2009

Many Canadians are interested to learn how the new TFSA account compares to similar accounts within other countries. As the neighbouring country of Canada is the US, many Canadians wonder how their new tax free account compares to the US equivalent, the Roth IRA.

Wondering how they each stack up in terms of Eligibility, Annual Contribution Amounts, Income Requirements and Investment and Withdrawal Rules? Look no further.

Read the full article here: http://ezinearticles.com/?TFSA-Vs-IRA&id=1861883

Important TFSA News, Resources and Links

May 4th, 2009

Every day more and more Canadians are learning about the Tax Free Savings Account (TFSA) every day. ING Direct says about 170,000 customers have signed up since early October. At RBC Direct Investing in Toronto, Donna Nelson says more than 2% of the company’s clients opened TFSAs in the first two weeks of January — an impressive number considering RBC Direct Investing is one of Canada’s leading online brokerages.

Have you just heard about the TFSA now? Don’t worry, many people are just learning their way around as well. If you are looking for a short list of great resources on the Tax Free Savings Account (TFSA) then look no further. We have compile the following list as a go-to resource and reference for you. If you know of a valuable site that would benefit others and want us to add it, feel free to drop us a line and let us know.

Meet Mr. Jamie Golombek.

Jamie is a contributing writer to the Financial Post and National Post. His number one resolution is to open a TFSA. According to Golombek “the new tax-free savings account, launched Jan. 1, is the ideal place to put up to $5,000 of savings and earn tax-free income and/or gains for life. Any withdrawals are not taxed, do not negatively affect eligibility for government-tested benefits and can be re-contributed the following calendar year.”

Here are a few more of his financial resolutions. The full article including the rest of Golombek’s Top 10 tax tips for 2009 is available here:

Resolution #2: Maximize RRSP contributions. The RRSP limit for 2009 is the lesser of 18% of 2008 earned income or $21,000. Get a head start on your 2009 contribution today.

Resolution #3: Set up a spousal RRSP. The primary benefit of a spousal RRSP is that funds withdrawn can generally be taxed in the hands of the (hopefully) lower-income spouse.

Resolution #4: Earn tax-efficient investment income. For those who have maxed out their RRSP and TFSA contributions, consider tax-efficient investment income outside of these tax-sheltered plans by investing in Canadian dividends, which are eligible for the dividend tax credit, and capital gains, which are only half-taxable.

There are many other good ideas that Jamie lays out in his article. I recommend you go and read it at your first convenience. If you are looking for more information on whether to contribute to the TFSA or RRSP this season click here.