Here is the updated text format help page from TextEdit:
About rich text, plain text, and Word formats
TextEdit can create three different file types: Rich Text Format (RTF) files, plain text files, and Word Format files. Plain text files have the filename extension ".txt", RTF files are given the filename extension ".rtf", and Word files are given the extension ".doc". You can prevent the filename extension from being shown by selecting the "Hide extension" checkbox in the Save dialog.
Only RTF and Word files can include paragraph and font formatting. If you add graphics to an RTF file, its file extension is changed to ".rtfd." Most word processors can open RTF files.
Microsoft Word can open Word Format files. Not all Word file features (tables, for example) are supported in TextEdit.
Plain text files have preset tab stops that cannot be changed. Font styles and colors in plain text files are not saved when a document is closed and reopened. Nor can graphics or other embedded files be added to plain text documents.
To learn more about formatting TextEdit documents, click "Tell me more," below.