A Non-Taxing New Year’s Resolution: The Tax-Free Savings Account

Moore from Ottawa
By Fundy Royal M.P. Rob Moore
January 09, 2009

Greetings from Ottawa,

January 6, 2009 -- Whether it’s spending less, saving more or losing the 15 pounds gained over the holidays, Canadians often begin their New Year by resolving to make improvements to our lives and the lives of our families. Our government has one long-standing resolution: to ensure hard-working Canadians save on their taxes.

For too long the earnings on the savings of Canadians were being taxed by the government. In order to take advantage of our government’s extensive tax cuts, a great option is the new Tax-Free Savings Account.

On January 1st, Canadians aged 18 or older will be able to open one of these accounts and contribute up to $5,000 per year. Any earnings will be entirely tax-free. Unlike an RRSP, you can take money out and put it in at any time with no tax penalty.

The goal behind the Tax-Free Savings Account (TFSA) is simple: rewarding prudence. Responsible Canadians can take advantage of this to put money aside for emergencies, a rainy day, or a big purchase that’s coming down the pipe; the TFSA rewards all Canadians by protecting their hard-earned savings from the taxman.

Canadians at any point in their lives and at every income level can benefit from the TFSA. A student saving for a first car or a young family looking to fix-up their first home can take advantage of the TFSA’s penalty-free withdrawals in ways that RRSPs don’t allow.

I encourage you to see if opening a Tax-Free Savings account in the New Year is right for you. It makes sense for today’s economic reality, as well as for a tomorrow that we can all look to with confidence.

I always enjoy hearing from constituents and welcome your feedback and questions on issues important to you at moorer@parl.gc.ca