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April Dorey,
Investment Advisor

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April Dorey, FMA, FSCI
Investment Advisor, Raymond James

April Dorey is an Investment Advisor with Raymond James. She began her career in the financial services industry more than fifteen years ago. Her career highlights include winning the National Award for Service Excellence from a previous firm in 1998 and being awarded the Fellowship of the Canadian Securities Institute in 2006. April has a Bachelor of Commerce degree specializing in Entrepreneurial Management. April is licensed through IIROC and FINRA allowing her to deal with residents of Canada and the United States.

Please feel free to contact me if you have any questions regarding your current portfolio or to explore options for future investments.

April Dorey, B.Comm, FMA, FCSI
Financial Advisor
Raymond James
10th Floor, 1175 Douglas Street
Victoria, BC.
Tel. 250-405-2429
www.aprildorey.com

June 2010

Tax-Free Savings Accounts

Tax Free Savings Accounts (TFSA) are a versatile and flexible investment vehicle for anyone with $5,000. When you’re relying on your savings to help you meet day-to-day expenses, it’s important to keep that money easily accessible. Unfortunately, for many, this means the money sits in a traditional chequing account paying little or no interest. Most financial institutions now offer higher interest alternatives for savers, but interest income is heavily taxed.

By saving in your Tax-Free Savings account this allows your money to grow tax free until it’s needed. Available to Canadian residents who have reached the age of majority and older you can invest up to $5,000 in your TFSA each year. There is no income tax deduction is available for contributions and unused contribution room can be carried forward indefinitely. When you make withdrawals from your TFSA you automatically create new TFSA contribution room, and there are no penalties if you do not pay this money back.

All forms of income earned within a TFSA (e.g. investment income, dividends or capital gains) are not taxable. The only tax you might notice is non-resident tax levied by foreign governments on investment income. For example, dividends from shares of US securities will be charged the 15% non-residence tax. This is because TFSAs are not exempt from withholding tax on foreign investments.

April Dorey June 2010 TFSA vs RRSP

Income Splitting Benefits

Couples often save and plan together in an effort to reduce their total taxes; however, the income attribution rules generally block most attempts. While these rules eliminate most income-splitting opportunities, the TFSA is not affected.

Canadians can contribute to their spouse’s or common-law partner’s TFSA, depending on their spouse or partner’s available room. This allows a higher-income spouse to split income by contributing to the TFSA of a lower-income or stay-at-home spouse. However, any money invested in your partner’s account is considered your partner’s money from a tax standpoint.

For lower income Canadians it may make more sense to accumulate money in the TFSA instead of their RRSP since the money still grows tax free but there is no tax levied on withdrawal. The TFSA is also a great place for interest-bearing investments.

April M. Dorey, B.Comm, FMA, FCSI
T: 250.405.2429 or 1.877.405.2400
april.dorey@raymondjames.ca
www.aprildorey.com

*Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. You should discuss any tax or legal matters with the appropriate professional. Written by April Dorey and expresses the opinions of the author and not necessarily those of Raymond James Ltd. Statistics and factual data and other information in this newsletter are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. Securities-related products and services are offered through Raymond James Ltd., member CIPF. Financial planning and insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a member CIPF.

© April Dorey. Articles, statistics and other data referred to or cited are intended to provide readers with potentially useful information for their own personal use and are not intended to replace direct consultation from a qualified Investment Advisor or related certified/licensed professional. All comments and opinions, unless otherwise noted, are by April Dorey and express the opinions of the author and not necessarily those of Raymond James. Reproduction without permission is permitted with due acknowledgement.

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