Whether you’re a small business owner, web designer or consumer, this is an opportunity Canadians should embrace.
Starting in 2009 any Canadian over the age of 18 can annually put up to $5,000 in a tax free saving account (TFSA). Income earned by the TFSA is non-taxable, but you won’t get a tax refund on the amount invested like an RRSP contribution.
Your TFSA can hold the same things as an RRSP: cash, guaranteed investment certificates (GICs), term deposits, mutual funds, government and corporate bonds, stocks traded on public exchanges, and shares of some small business corporations.
Conveniently coinciding with the economic downturn, most people feel the TFSA represents a great way to save money, particularly if filled with high tax investments. However, critics cite that with the marginal interest rates, not much money will be saved for the average household.