Category Archives: TFSA

2015 Income tax rates

Canadian Tax Brackets 2015 | Income Tax Bracketsimages 2

  • 15% on the first $44,701 of taxable income
  • 22% on the next $44,702 of taxable income (on the portion of taxable income between $44,702 and $89,401)
  • 26%on the next $89,402 of taxable income (on the portion of taxable income between $89,402 and $138,586)
  • 29% of taxable income over $138,586

Are you making the most of your TFSA?


On January 1, 2015,

Canadian residents age 18 and over received a new year’s gift from the federal government: $5,500 in additional Tax‑Free Savings Account (TFSA) contribution room. Haven’t opened a TFSA yet? If you were a Canadian resident 18 or older when the program was launched in 2009 and have never contributed, you now have a cumulative total of $36,500 in contribution room. Couples where both are eligible would have $73,000 between them.

TFSAs can play an important role in many families’ financial planning. These flexible accounts, appropriate for many different saving goals, offer tax‑free investment growth and tax‑free withdrawals. If you withdraw, you can recontribute the same amount in the following calendar year. TFSAs also offer an opportunity for income splitting (either spouse or partner can contribute) and estate planning.

Yet many eligible Canadians don’t have a TFSA, many of those who do haven’t maximized their contributions, and TFSA assets are often in cash rather than in an appropriately diversified portfolio. In other words, many of us are not making the most of our TFSAs. Are you? If not, here are five tips to help you catch up.

1. Contribute your tax refund

If you’re expecting a tax refund this year, consider depositing this “found money” directly into your TFSA. If you get the average refund of around $1,600¹, your TFSA contribution could grow to $2,865 over 10 years at an annually compounded rate of return of 6%.

2. Make an in-kind contribution

You don’t necessarily have to find extra money in your budget or cash out investments to make a TFSA contribution. Instead, you can make an in-kind contribution of a qualified investment from a non-registered account. Your contribution amount will be the fair market value of your investment.

If you’re contributing an asset that has increased in value, however, caution is advised. The transfer may trigger a taxable capital gain, or a capital loss that could not be claimed.

3. Set up regular contributions

One of the most effective ways to maximize your TFSA contributions every year is to set up regular contributions. It’s often easier to plan to make weekly contributions of just over $105 or monthly contributions of just over $450 than annual contributions of $5,500 — and the money you contribute earlier in the year can benefit from more time growing tax‑free.

4. Maximize tax‑free growth

As with any other account, how you invest your TFSA funds can make a big difference to your savings down the road. Many Canadians are very conservative in their TFSAs, favouring high-interest savings accounts and guaranteed investment certificates. That may be appropriate if your goals for your TFSA money are short term. If you have more time before you plan to access your TFSA savings, investments with higher potential rates of return can help you take greater advantage of tax‑free growth.

5. Talk to your Financial Advisor

Whether you’re building a contingency fund, saving for short- to medium-term goals, or supplementing longer-term savings in a Registered Retirement Savings Plan (RRSP) or Registered Education Savings Plan (RESP), your TFSA is an excellent, flexible way to help you reach your goals. Talk to your CIBC Financial Advisor about how to make the most of your TFSA.

TFSA snapshot

Here is a quick look at what other Canadians were doing with their Tax‑Free Savings Accounts as of 2012.

How many Canadians had a TFSA? 9,596,830
How many Canadians contributed? 6,174,590
How many Canadians maximized their contribution? 2,254,030
What was the average contribution? $5,425.98
What was the average unused contribution room? $9,969.19
What was the average fair market value? $9,117.88

CRA Requirements for Invoices

The CRA’s requirements for invoices depend on the total sale amount.

For sales Under $30, there are 3 pieces of information:
– The name of the business
– The invoice date
– The total amount paid

For sales Between $30 and $149.99, include the above 3 points, plus:
– The total amount of HST/GST charged on the sale
– If the sale has items taxed at different rates, you must show the break-down of the amount of tax at each rate
– The business number of the business issuing the invoice

For sales Over $150, all points above must be included, plus:
– A brief description of the goods or services
– Terms of payment

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