The Government of Canada has decided to be “as flexible as possible” in cases where a genuine misunderstanding of TFSA contribution rules resulted in TFSA excess amount penalties. If you are one of the 70,000 or Canadians who have received a letter from the Canada Revenue Agency asking for further information about your TFSA account, [...]
This post was originally published on June 15, 2010. I’m republishing it with updates on how and where to apply for waiver of TFSA over-contribution penalties. Update on June 27, 2010: The Government has decided to provide relief to taxpayers whose net TFSA contributions never exceeded $5,000 in 2009. The deadline for responding to the [...]
The Tax-Free Savings Account (TFSA) was introduced as a vehicle that would shelter investments from tax. Many tax payers are finding that instead of saving tax on investment returns, the TFSA is costing them money. These tax payers are now being charged penalties for the 2009 tax year to the tune of 1% per month [...]
You may want to check out a recent C. D. Howe Institute report titled Saver’s Choice: Comparing the Marginal Effective Tax Burdens on RRSPs. The report concluded that TFSAs are a more tax-efficient retirement savings vehicle than RRSPs for many Canadians because the effective rate of tax payable on retirement income is often higher than [...]
The Department of Finance is cracking down on what it calls “the use of inappropriate transactions to draw excessive benefits” from Tax-Free Savings Accounts. The amendment targets deliberate overcontributions to TFSAs, holding non-qualified investments in TFSAs and swap transactions between TFSAs and other accounts. Penalizing the first two strategies makes sense but it is not [...]
I’m not exactly early to the party but I’m now researching my Tax-Free Savings Account (TFSA) options and looking to shelter part of our emergency funds in a TFSA. Since the funds must be readily accessible, the TFSA would either be a high interest savings account or hold cashable GICs, which rules out self-directed or [...]
In an interview with Jon Chevreau of the Financial Post, actuary Malcolm Hamilton proposed adding retroactive contribution room to a TFSA to help more Canadians save for retirement. Here’s how the proposal would work: $5,000 of contribution room would be added for every year since age 18 to the 2010 TFSA contribution room. For instance, [...]
If the number of questions about Tax-Free Savings Accounts is any indication, the TFSA is going to be very popular with Canadians. Here are some popular questions that are asked regularly: Can I have more than one TFSA account? Does the contribution room apply across all TFSA accounts? You can have as many TFSA accounts [...]
Just like with RRSPs and to some extent, RESPs, Canadians will have three options when it comes to Tax-Free Savings Accounts (TFSA): Savings TFSA: ING Direct has already announced a TFSA account that can hold cash or GICs and is promising to keep its tradition of charging no fees and requiring no minimums. A savings [...]
When the Tax-Free Savings Account (TFSA) was announced in Budget 2008, the Government called it “an RRSP for everything else in your life”. While the TFSA provides tax sheltering just like a RRSP or a RESP, the flexibility it offers will justify the hype surrounding it and allow us to use it more widely than [...]
