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With the new TFSA account becoming available to Canadians in the 2009 tax year, many business owners are interested to find out how this account may be beneficial for not only their own financial future, but also that of their business.

TFSAs Primary Benefits

There are several financial benefits of the new TFSA accounts that small business owners should take into consideration.

1. Tax free investment growth- The funds inside of the TFSA will grow on a tax deferred, tax free basis. Any account activity, capital gains or dividends will be treated on a tax free basis which is an attractive feature for active and passive investors.
2. Tax free withdrawals- Tax free withdrawals are attractive as funds saved into this account will not add to the individual’s or the business’s annual tax liability.
3. Catch up or re-contribution limits- This provision allows an account owner to save into the TFSA accounts at future points if they did not take advantage of the annual maximum for prior years. And, if the funds were withdrawn, the re-contribution provision allows the account owner to replenish the funds without penalty. This provision is particularly important to business owners as it will allow them to use the account over and over again to meet their growing financial needs on an ongoing tax free basis.
4. Investment Flexibility- The TFSA account owner can invest in virtually any type of investment within their account, including individual securities, mutual funds, individual bonds, real estate investment trusts, cash investments and some private corporations. This flexibility makes the TFSA a great choice for any investor as they can choose their own investment diversification and balance based upon their personal risk tolerance, their investment goals, their total investable assets and their investment time frame.

Because the funds within a TFSA are so flexible, they can be used to aid a small business in several primary ways. They can be used to start a small business, to fund necessary operating costs of a current business, to obtain additional financing as a down payment or for expansion needs. And as the funds can be replenished over and over again, the account can be replenished and reused for future business needs.

The initial annual contribution limit per person has been set at $5,000 per year. But this amount is set to increase on an annual basis. Any Canadian who is over the age of 18 and who has a social insurance number is eligible to contribute funds into a TFSA, no matter what their stated annual income is for tax purposes.

Canadians need to save for many different purposes over their lifetimes. Reducing taxes on savings can help. That’s why the Government has introduced a new Tax-Free Savings Account (TFSA). It’s likely the single most important personal savings vehicle since the introduction of the Registered Retirement Savings Plan (RRSP).

The TFSA will allow Canadians to set money aside in eligible investment vehicles and watch those savings grow tax-free throughout their lifetimes. TFSA savings can be used to purchase a new car, renovate a house, start a small business or take a family vacation. With the TFSA Canadians from all income levels and all walks of life can benefit.

Download your Free Special Independent Review of the TFSA at: http://TaxFreeSavingsAccountInfo.com/