Looking for experienced chartered accountants in Mississauga, proficient Rakesh Majithia is there to offer cutting-edge tax and risk management service for a competitive price. Browse the site for more information.
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New tax saving account limit, how it’s going to affect you as a canadian
1. New Liberal government has recently announced many changes in tax and one of the
changes is Tax Free Savings Account (also known as “TFSA”). As of January 1, 2016 this
limit has decreased back to $5,500 per person from $10,000 that was available during
Conservative government since 2009 – Inception of TFSA.
The TFSA program started in 2009 for those who are 18 years or older with a valid Social
Insurance Number (SIN) to help them save tax-free throughout their lifetime. Contributions
to this plan is not tax deductible for income tax purpose and income earned through money
invested in this plan is tax free even when withdrawn. This plan meant for Canadian
residents. Those who become non-resident of Canada and have funds kept invested in this
plan will have 1% tax charged (while they are non-resident) for every month the funds
stays invested in the plan. Those individuals or families moving out of Canada are advised
to contact our office for further details and TFSA planning opportunity while moving to USA
or other countries out of Canada.
What happens when you become a non-resident of Canada?
As mentioned, TFSA is meant for those who are residents of Canada. However,
circumstances change for people who move to Canada or move Out of Canada. If you are
considered a non-resident of Canada or move out of Canada and become a non-resident
individual who is 18 years or age or older:
You will be allowed to keep your TFSA and you will not be taxed in Canada on any
growth or for withdrawal;
Any withdrawals that you make during your non-residency will be added back to your
room. However, this will be available only when you return back to Canada or
reestablish your residential ties with Canada; and
You will not have any room accrual while you are a non-resident of Canada
You must consult your tax advisor for further details and get advice on becoming a resident
or non-resident of Canada. While rules may be as described, other countries (i.e. United
States) may have different rules for the same treatment. If you consider moving south of
the border (or any other countries for that case), you are encouraged to consult your
trusted Cross-border tax advisor who can assist your TFSA, RRSP and other vehicles that
may benefit you in a long-run.
For more information Visit : http://rakesh.ca/