Location: God's own country
Posted on: 28-10-09 07:45:31
Quote:
Originally posted by dimple2001
On a another note, the TFSA is tax free, not just tax deferred.
Nope. TFSA is not tax free. Only the interest is tax free. There is a cap of $ 5 K per person each year. Amounts from the TFSA can be withdrawn / put back at your descretion.
To the OP :
apart from the above - >
I have heard from multiple sources that an Accountant can get a $ 15K refund for you (legally) one time. So you might want to look into this. Since I was no where in the high income bracket, I have never used it / nor interested in it.
Hope this helps.
Peace by a PD
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I am a Gents and not a Ladies.
Location: Western Hemisphere
Posted on: 28-10-09 08:22:43
Quote:
Originally posted by tamilkuravan
Nope. TFSA is not tax free. Only the interest is tax free. Peace by a PD
So, is the principal amount taxed? The answer is no. You are contributing the principal from after tax money. So, when you withdraw the principal for any reason, your principal is not taxed. Hence TFSA is considered tax free.
Earnings, of course are tax free.
If you intepret from the time before contribution, yeah, you could say it's not tax free, because you are paying taxes on some future potential money that you may be contributing towards TFSA (i.e., after tax money as contribution). But, that would be a convoluted interpretation.
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Dimple2001
Quote:
Originally posted by dimple2001
Quote:
Originally posted by tamilkuravan
Nope. TFSA is not tax free. Only the interest is tax free. Peace by a PD
So, is the principal amount taxed? The answer is no. You are contributing the principal from after tax money. So, when you withdraw the principal for any reason, your principal is not taxed. Hence TFSA is considered tax free.
Earnings, of course are tax free.
If you intepret from the time before contribution, yeah, you could say it's not tax free, because you are paying taxes on some future potential money that you may be contributing towards TFSA (i.e., after tax money as contribution). But, that would be a convoluted interpretation.
So, TFSA after all is not tax free as per my understanding as you are investing after paying tax. I think what OP (and me too) want to know is, Can we have something to invest which we can show for tax exemption in gross salary (like in India we used to declare annual investment and on that basis company determine your taxes)..For TFSA, If both partner save max 10k at 1% interest rate, the tax free interest is hardly 200$ for that year..This is very negligible amount looking towards salary..
Location: Western Hemisphere
Posted on: 28-10-09 09:46:14
Quote:
Originally posted by imwhoever
For TFSA, If both partner save max 10k at 1% interest rate, the tax free interest is hardly 200$ for that year..This is very negligible amount looking towards salary..
You are right if you consider TFSA as part of short term safe investment. I am, on the other hand, treating TFSA as a long term growth investment. Hence I have invested in equities (stocks/mutual funds) that would potentially provide a much higher returns (at potentially higher risk, of course).
Actually, ING Direct savings offered up to 3% on TFSA accounts. You may want to check it out.
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Dimple2001
You are right if you consider TFSA as part of short term safe investment. I am, on the other hand, treating TFSA as a long term growth investment. Hence I have invested in equities (stocks/mutual funds) that would potentially provide a much higher returns (at potentially higher risk, of course).
Actually, ING Direct savings offered up to 3% on TFSA accounts. You may want to check it out.
Sorry to loss the track of this thread. I am not thinking for long or short term investment. I am only concerned about tax exemptions at this moment. And for that matter I dont see TFSA attractive option. Between..for TFSA someone suggested Manulife over ING Direct..is it true?
TFSA does not really count as tax exemption as you will still try to make maximum contribution to RRSP as well as utilise any other tax-exemption avenues. Whatever interest you can earn on 5K will be tax free
Did anybody hear that ad on CINA radio about getting 90% return of your tax? I do not believe him for one second, but it would be interesting to find out how anybody can get 90% of tax in return.
Location: Western Hemisphere
Posted on: 08-12-09 12:17:20
Quote:
Originally posted by imwhoever
Sorry to loss the track of this thread. I am not thinking for long or short term investment. I am only concerned about tax exemptions at this moment. And for that matter I dont see TFSA attractive option. Between..for TFSA someone suggested Manulife over ING Direct..is it true?
For your purpose, no, TFSA is not an attractive option. Also, ING no longer offers the 3% I referred in my previous post. I don't know what Manulife offers.
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Dimple2001
