The amount Canadians can stash away each year in tax-free savings accounts is increasing by $500 to $5,500, starting Jan. 1, 2013.
Therefore if a tax payer has not contributed since the TFSA was introduced then the unused contribution room carried forward accumulates to $25,500 of available room for 2013.
TFSA's allow for funds to be invested tax free. Interest, dividends and capital gains earned in these accounts are not subject to tax.
Funds can be withdrawn tax-free at any time for any purpose, and re-contributed one year later.
Another great tip regarding TFSA's is that spouses can contribute to each other's TFSAs plans.
To learn more about how to maximize tax savings and refunds, contact M2 Financial at 905-655-6777.