Page 43 - Newcom

INSIGHTS 43
Resist
the urge
to dip into
your RRSP
Continued from page 41
reduce their tax obligation and maximize their savings over many years.
If you need more flexibility and less restriction, a tax-free savings account (TFSA) is a better option.
A TFSA is a way for adults to set money aside tax-free throughout their lifetime. Any amount you put into a TFSA as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it’s withdrawn.
There’s a limit to how much you can contribute (the annual TFSA dollar limit for 2015 was $10,000), but you can see how much room you have by using My Account at www.cra.gc.ca/myaccount or by phoning 800-267-6999.
Your life
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Since you can generally withdraw
any amount from the TFSA at any time without penalties, it’s a useful financial tool. Why not establish a TFSA at your bank and deposit your GST/HST refunds there? Your money can grow tax-free un- til you send your payment to CRA.
Your lane
A TFSA can be your rainy day fund, an account for emergencies like a major re- pair that you’d otherwise put on a credit card. You don’t want to be paying for that engine rebuild for the next 10 years.
Talk to your accountant about how to maximize the use of both programs. Bet- ter yet, your advisor can help you plan for times when cash is tight without having to deal with the consequences of tapping into your RRSP.
Scott Taylor is vice-president of TFS Group, a Waterloo, Ont., company that provides ac- counting, fuel tax reporting, and other busi- ness services for truck fleets and owner/ operators. For more information, visit www.tfsgroup.com or call 800-461-5970.
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EDITORIAL:
James Menzies
EXECUTIVE EDITOR
416-510-6896
james@newcom.ca twitter.com/JamesMenzies
Sonia Straface
ASSISTANT EDITOR
416-510-6890
sonia@newcom.ca
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