Government, Banks, and many Financial Advisors have promoted the income tax advantage of tax-sheltered growth inside a TFSA. While the promise of tax-sheltered growth is certainly attractive one must remember that TFSAs are invested with personal, after tax, dollars. As shown in Myth #5, as you draw funds from your corporation for personal use, you must pay personal tax at progressively higher rates as your income level rises. If you were in a 30% personal tax bracket you would need to draw a little over $7,125 to net $5,000 for the TFSA yearly deposit. In other words, you just gave the Government $2,125 ($7,125 - $5,000) in additional tax to invest $5,000 in a government sponsored TFSA. Already your $5,000 TFSA has lost 30% before the money even gets invested.