The Canada Revenue Agency recently advised more than 70,000 Canadians that they must pay penalties for over-contributing to their tax free savings accounts in 2009.

You can make tax-free withdrawals from your TFSA at any time. You can put the money back in, as well, but the main limitation here is that you have to wait until the next calendar year …read more »

Every year, you gain an additional $5,000 of contribution room in your tax free savings account (TFSA). That means you have $10,000 of contribution room in 2010, rising to $15,000 in 2011, $20,000 in 2012 and so on. You also get to carry forward unused contribution room from previous years.

Tax-free savings accounts let you earn investment income — including interest, …read more »

It’s particularly easy for investors to make costly mistakes during the year-end tax-loss selling season. That’s because the lure of a lower tax bill can be a temptation to dump high-quality stocks that are near the end of a downturn, and are set to move back up.

A similar pitfall exists during the end-of-the-year rush to take advantage of certain …read more »

The federal government first made tax free savings accounts (TFSAs) available to investors in January 2009. These accounts let you earn investment income — including interest, dividends and capital gains — tax free. However, you could only contribute $5,000 in 2009 to start your tax free savings account.

Every year, you gain an additional $5,000 of contribution room (indexed to inflation …read more »

Investors continue to look for ways to profit from rising commodity prices. Some are considering a unique kind of tax shelter: flow-through funds.

Flow-through funds mainly invest in flow-through shares issued by junior mining and oil companies. The companies spend the money they receive for these shares on mineral exploration and development, which carries certain tax benefits, in the form of …read more »

TFSAs let you earn investment income — including interest, dividends and capital gains — tax free.

You could only invest $5,000 this year to start your TFSA. However, you gain an additional $5,000 of contribution room (indexed to inflation and rounded to the nearest $500 on a yearly basis) every year, plus you get to carry forward unused contribution room from …read more »

Ottawa’s new Tax-Free Savings Accounts (or TFSAs) let you earn investment income — including interest, dividends and capital gains — tax free.

A tax-free savings account can generally hold the same investments as an RRSP. This includes cash, mutual funds, publicly traded stocks, GICs and bonds.

However, you are best to hold lower-risk investments in your TFSA. That’s because you don’t want …read more »

Registered retirement savings plans, or RRSPs, are the best-known and most widely used tax shelters in Canada. The tax treatment of RRSPs is what sets them apart from other investment accounts. Ottawa created RRSP tax shelters to let Canadians invest money on a tax-deferred basis, presumably for retirement.

You can put money in RRSP tax shelters each year (up to a …read more »

This past year brought richly rewarding takeovers of several of our long-time favourites including Falconbridge, Inco, Fairmont and Sleeman. As a result, you may face a substantial capital-gains tax bill.

Before yielding to the year-end tax-loss selling urge, keep in mind that it’s always a mistake to sell good stocks at this time of year. Tax-loss selling sometimes drives share prices …read more »

Flow-through funds are tax shelters that mainly invest in the flow-through shares issued by junior mining and oil companies. These companies spend the proceeds from the shares they sell on mineral exploration and development, an activity that qualifies for certain tax credits and tax deferrals. These tax benefits “flow through” to investors in the fund. To take advantage of these …read more »