Press release from the CRA

Visit the CRA site on TFSA

The current Points per Value (PPV):

The new PPV:

Don’t be fooled by the increase in value per reward level because the PPV (or cost) has increased substantially on average (a 15.11% increase) and per reward level.  Long story short, Shoppers Optimum Point members are getting less bang of their buck, so if you have been collecting for a rainy day…it may be time to redeem.

1. The current contribution maximum is $5000.

Keep to it!

2. You can withdraw from your TFSA at any time, however whatever you withdraw cannot be contributed back to your TFSA if you have already used up your contribution room for that calendar year.

For example,

January 1, 2010 – You contributed $5000 to your TFSA (maximum for this year)

June 17, 2010 – You withdrew $1000 from your TFSA

July 17, 2010 – You redeposited $1000 back into your TFSA

In 2011, when you file your taxes for 2010, you will be charged $50 in tax penalities ($1000 x 0.01 x 5 months)

3. Be patient.  If you have withdrawn from you TFSA, you will get that contribution room back, but only after the end of the calendar year.

For example,

January 1, 2010 – You contributed $5000 to your TFSA (maximum for this year)

June 17, 2010 – You withdrew $1000 from your TFSA

You now have an extra $1000 in contribution room for 2011.

Just follow these simple rules and you will avoid any unnecessary taxes on your TFSA.

Many people know about the homebuyers’ tax credit, but the potential tax credit for paying rent is a lesser known benefit. This is probably because paying rent does not affect federal income taxes.

Since the tax credit is only open to residents of the aforementioned provinces, your chances of receiving it might be small but the savings could be big.

Any taxpayers above the age of 16 who were Manitoba residents on December 31, 2009 and paid more than $1,250 in rent are eligible to claim the Education Property Tax Credit. But roommates should be warned that only one person can claim this amount on their tax returns.

Manitoba residents can find some considerable cash savings with this tax credit. Renters under the age of 65 can receive credit for up to $675, with a minimum saving set at $650 depending on income. For residents over the age of 65, the minimum amount does not change, but you might earn up to $800 in credit.

The Education Property tax credit in Manitoba is akin to the Property Tax Credit in Ontario. If you were a rent-paying Ontario resident above the age of 16 on December 31, 2009 you can claim this tax credit.

Ontario renters under 65 will receive either $250 or 20 percent of the rent paid – whichever is less. For Ontario renters above the age of 65, the maximum credit increases to $625. An additional benefit for Ontario residents is the option to combine the Property Tax Credit with the Sales Tax Credit. This maxes out at $1,000 for people under 65 and $1,125 for people over 65. Again, this credit depends on your level of income so the more you earn, the credit gets smaller.

Last but not least, renters in Québec stand to gain tax credits thanks to the Relevé 4. Québec renters who were residents on December 31, 2009 should receive a Relevé 4. This will include information about your December rent and your portion of property taxes. The maximum property tax refund available is $602 for 2009.