Saving just got a whole lot easier!
The Tax-Free Savings Account (TFSA) is a way for individuals who are 18 and older and who have a valid social insurance number to set money aside tax-free throughout their lifetime. Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn.
TFSA Contribution Room
Your TFSA contribution room is the maximum amount that you can contribute to your TFSA. Starting in 2009, TFSA contribution room accumulates every year, if at any time in the calendar year you are 18 years of age or older and a resident of Canada. TFSA contribution room will accumulate for each year even if you do not file an income tax and benefit return or open a TFSA. The TFSA annual room limit will be indexed to inflation and rounded to the nearest $500.