Confusion Reigns Over TFSA Rules

Confusion Reigns Over TFSA RulesContribution rules for a popular tax shelter continue to perplex ordinary Canadians, despite a year-long information blitz by the Canada Revenue Agency and the big banks. The agency sent out almost 103,000 letters to holders of tax-free savings accounts this month warning they likely over-contributed in 2010 — and now must pay additional tax. That number is up sharply from the 72,000 letters issued on June 1 last year for…

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Ottawa backs down on tax-free savings account errors

Ottawa backs down on tax-free savings account errorsFinally, the government has come to its senses about the 70,000 letters sent to Canadians who made over-contributions to tax-free savings accounts or transferred them without the proper paperwork. In a statement issued this afternoon, the two ministers responsible for the new tax shelter said they recognized the confusion that resulted from lack of understanding of the rules. And they’re trying to make amends. If you received a request to…

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The Importance of Paying Attention to Financial Statements

The Importance of Paying Attention to Financial StatementsI’ll relate my experience to underscore the significance of paying attention to your finances – not just the saving and investing parts but also the all-important records of those money transfers/contributions. I contributed to my TFSA account for 2009 in May of that year and rested in content that I had been prudent in taking advantage of the newly introduced savings vehicle. Since financial institutions do not issue an official…

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RRSP Spectacular!

RRSP Spectacular!The deadline is looming and Canadians still ponder about whether they should put more money into their RRSPs? When is the Deadline? According the to TD Waterhouse web site the deadline is Midnight on March 1st (so you get an extra banking day) for contributions to count on last year’s income tax. So you still have plenty of time to ponder this. A useful tool for this exercise is Quicktax’s…

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Run, don’t walk, Run to open a TFSA

Run, don’t walk, Run to open a TFSALook.  There’s no downside and all kinds of upside to the Tax Free Savings Account. Become a saver, already! Here’s how it works: 1. Set up a Tax Free Savings Account at any Canadian bank you like. 2. Every year, you can put in up to $5000. But $100 is just fine too. 3. Whatever that $5000 earns, you are never taxed on.  So you can go conservative and just…

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