January 01, 2009
Tax-Free Savings Account: A Resolution to Keep
For those of us who are looking for a good resolution that makes financial sense now and in the future, a great option is opening up the new Tax-Free Savings Account – one of the most significant of the many new tax cuts brought in by our federal government.
On January 1, 2009, Canadians aged 18 and older became eligible to open a Tax-Free Savings Account and contribute up to $5,000 per year. Interest earnings can accumulate in this account entirely tax-free, and you can withdraw your money at any time without paying a tax penalty.
The goal behind the Tax-Free Savings Account is simple: rewarding prudence. Responsible Canadians can take advantage of this new way to put money aside for emergencies, a rainy day, or a big purchase, with the interest shielded from taxes.
All Canadians, at any point in their lives and at every income level, can benefit from the Tax-Free Savings Account. Whether you are a student saving for your first car or you have a young family and want to fix up your home, you can take advantage of the Tax-Free Savings Account’s withdrawals in ways that RRSP’s don’t allow.
While the Tax Free Savings Account is a new tool to help us save more of our own money, we have all already been benefiting from tax reductions for several years now. Not only do we in government believe that you are the best judges on how to spend your own money, but we have been ahead of the curve in taking action to protect the Canadian economy from the looming global economic crisis.
All Canadians are paying less tax thanks to the GST cut and the reduction to personal and business taxes. In all, the average Canadian family has seen their annual tax bill go down by $3,500. These are real savings that we can all depend on.
So this year, why don’t you speak to your bank to see if opening a Tax-Free Savings Account is right for you? It makes sense for today’s economic reality, as well as for a tomorrow that we can all look to with confidence.
Hon. Rona Ambrose, P.C., M.P.