1

As long as you respect the free tax account limit, is it legal and correct to transfer Adsense earnings to free tax account in Canada? My objective is to not pay taxes on Adsense earnings.

Note : This type of account is called CELI (TFSA) in Quebec/Canada.

3

TFSA only shelter investment or interest gains on money or investments inside the TFSA. So, there's no problem transferring adsense earnings into a TFSA but you'd still need to pay taxes on your earnings prior to the transfer.

For example, let's say you have earned $5000 with adsense. You transfer all $5000 into your TFSA. In the course of the year, you make an additional $500 because you lucked out in your investments. So, what's the situation at the end of the year? You pay tax on your $5000 earnings. Your $500 gain in your TFSA is tax-sheltered.

  • I think the user is perhaps not clear enough on their available options and used the term 'tax free' in a general sense; an RRSP may suit their needs but would require sufficient contribution room and similar considerations. – Grade 'Eh' Bacon Feb 23 '18 at 17:56
  • That could be a very good plan, yes. They do explicitly mention TFSA, but as you point out, the RRSP would likely be a better match. – ChrisInEdmonton Feb 23 '18 at 18:04
  • Ah, I was not familiar with the French acronym CELI, and didn't recognize that without the later edit. – Grade 'Eh' Bacon Feb 23 '18 at 18:20

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