RSM324H1 Chapter Notes - Chapter 9: Deferred Tax, Tax Bracket
22 Feb 2017
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Chapter 9 other income, other deductions, and special rules for completing net income for tax. The annual permitted contributions to a tfsa are limited and not tax deductible, all qualified investment income (interest, dividends, capital gains) is tax-free when earned and when withdrawn from the account. Essentially, the tfsa is a vehicle designed to earn permanent tax-free investment income rather than the deferred tax format of an rrsp: contributions. Canadian resident individuals who are at least 18 years of age can contribute up to ,500 (2016) annually to a tfsa (,000 in 2015, ,500 in 2014/2013, Contribution limit is (cid:374)ot depe(cid:374)de(cid:374)t o(cid:374) a perso(cid:374)"s le(cid:448)el of i(cid:374)(cid:272)o(cid:373)e. Any unused portion of the annual limit can be carried forward indefinitely and contributed in any future year. Interest on money borrowed to invest in a tfsa is not deductible: over contribution. A 1%/month penalty tax will apply on the excess amount.
