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What is the Tax-Free Savings Account?

April 26, 2017savings account tax-free

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What is the Tax-Free Savings Account?

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The TFSA is a federal government-registered savings account that allows taxpayers to earn investment income tax-free within the account. Deposits of after tax money contributed to the account are not deductible for tax purposes. At the same time withdrawals of contributions and interest earnings from the account are not taxable. Moneys saved in a TFSA can be used for a variety of needs, i.e. new car purchase, house renovations, to start a small business, family vacation, etc. Withdrawn funds can be used for whatever the planholder wishes.