The Canadian Government began the Tax-Free Savings Account (TFSA) program in 2009. This program was a way for people 18 years or older to be able to put money away tax-free. The contributions into the TFSA are not deductible for tax purposes like the RRSP, but any income earned within the account are earned tax free and any withdrawals from the account are tax free as well.
Who can open a Tax-Free Savings Account?
- Anyone who is 18 years of age or older and has a valid Social Insurance Number can open a TFSA. The year a person turns 18 they cannot contribute until turning 18, but at that time may contribute the maximum for that taxation year.