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We understand the entertainment industry, and the people in it.

Tax-Free Savings Account

Authorized in the February 2008 federal budget, and launched in January 2009, the new Tax-Free Savings Account is the most important retirement savings vehicle since the RRSP was introduced in 1957.  The TFSA allows people 18 years of age and older to save up to $5,000 a year, out of after-tax income, and pay no further taxes on those funds or their investment returns.  Unlike a RRSP, there is no upfront tax deduction, but neither are the proceeds taxed when they are withdrawn.  This means interest compounds tax-free, as do capital gains and dividends generated by stocks.  Plus, any withdrawal you make frees up a comparable amount of new contribution room – the TFSA offers full flexibility to withdraw and re-contribute.

The TFSA is attractive for any person saving for any goal, from automobiles to vacations to home renovations.  And just as RRSP withdrawals have become a key tool for first-time home buyers, the TFSA offers a unique advantage for people entering the housing market – a TFSA withdrawal doesn’t have to be repaid.  It will also be attractive to low-income seniors, since tax-free TFSA withdrawals will not be added to income and will not trigger reductions in Old Age Security benefits or the Guaranteed Income Supplement.  There is no age limit for contributing to a TFSA and unused contribution room can be carried forward indefinitely.

As with RRSPs, TFSA holders can name spouses as beneficiaries and roll the proceeds over to them upon their death.  And as with spousal RRSPs, TFSA spouses can contribute to their partner’s TFSA. This means couples can shelter up to $10,000 worth of new investments every year from tax.  And high-income investors who may have maxed out their RRSP room can use the TFSA for additional shelter, and to receive dividends from foreign investments which do not qualify for the dividend tax credit.  There is no foreign content limit on a TFSA.  Qualified investments in the TFSA include any arm’s length investment that could be held in a RRSP, such as term deposits, investment savings accounts, stocks and mutual funds.

In contrast to conventional savings vehicles, where unregistered investments attract interest income at the taxpayer’s top marginal rate, every person with a taxable investment account can now tuck $5,000 of income-producing assets into a tax-free account – annually.  With the TFSA, millions of Canadians are now able to manage their savings in a tax-efficient way.


Click here for more information and our user-friendly TFSA calculator.


NEWS: Frank Manzo appointed CEO

Creative Arts Savings & Credit Union is pleased to announce the appointment of Frank Manzo to the position of CEO. Read the release...

Look Who's Talking

Shelley Cook recalls a time when she approached one of the big banks for a loan. “I told them I was a stunt girl and they said ‘Do you have a real job?’ “ Read more...

Deposit Insurance

Did you know that deposits in Creative Arts Savings & Credit Union are insured by the Deposit Insurance Corporation of Ontario? So you can rest comfortably knowing your deposits are safe.    Read more... 

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625 CHURCH STREET. 1ST FLOOR, TORONTO, ON  M4Y 2G1
416.642.6749  |  877.643.3660  |  info@creativeartscu.com

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