Tax-free savings account (TFSA) contribution rulesIncome - Small businessess from 1 to 80 employees outsource your payroll management to us and let us worry about your payroll processing.
RSS Follow Become a Fan

Delivered by FeedBurner

Recent Posts

Tax changes to expect when you’re expecting
2016 Tax Tips for 2015 Filing Year
From Proprietorship to Corporation - When is the Best Time to Incorporate?
Tax Specialists Brief your Clients About CRA Fraud And E-Mail Scams
Bank of Canada cuts rates again

Most Popular Posts

Help your teenager build credit responsibly
Being an Executor of an Estate
Student Line of Credit
Principal Residence Exemption


aliko nutrition store- isotonix
aliko payroll services
canada revenue news and videos
canadian news
Cross border Tax
Disability awareness and Benefits for disabled
estate planning
Home Car Insurance
Income Splitting Strategies in Retirement
kids and money -set your children up for financial success
life insurance
on line safety tips
online safety tips
Real Estate - Investments / Retirement
Retirement planning
Save your money
small business planning
Tax Information for Students
tax news
tax planning
Tech news


January 2016
July 2015
May 2015
April 2015
February 2015
December 2014
November 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013

powered by


Tax-free savings account (TFSA) contribution rulesIncome

Tax-free savings account (TFSA) contribution rulesIncome
Tax-free savings account (TFSA) contribution rulesIncome
 Tax Act s. 207.01(1)The basic rules relating to tax-free savings account include the following:Contributions can be made by Canadian residents aged 18 or over at the time of the contribution.Up to $5,000 per year ($5,500 for 2013) can be contributed, with unused contribution room being carried forward.The annual contribution limit is indexed to inflation in $500 increments (i.e., to the nearest $500), in the same manner as personal tax credits and tax brackets are indexed.  The 2013 TFSA limit is $5,500.  The Department of Finance announced this in a news release on November 26, 2012.There is no lifetime limit to the amount of contributions.If a person has contribution room, but no funds to contribute, they may contribute funds given to them by their spouse or common-law partner, with no attribution of income to the spouse.Contributions can consist of in kind contributions of qualified investments.  At the time the investments are contributed, there is a deemed disposition.  Any resulting capital gain will be taxablecapital loss cannot be claimed - see our article Transfer shares to a registered account, but not at a loss!The easiest way to establish a record of your TFSA contribution room is to file a tax return annually, even if you have no taxable income.  Your TFSA contribution room can then be seen through Canada Revenue Agency's My Account or Quick Access e-services, or you can phone CRA to get the balance.  However, the amount reported will only be correct as of January 1st of each year, after financial institutions have reported all TFSA transactions for the prior year, which may not be until the end of March.  Thus, it's important to track this yourself.  The history of annual limits for each year is shown in this table:  The first year that contributions could be made was 2009.YearsTFSA Annual
2009-2012$5,000$20,00020135,50025,500CRA says that Individuals who have not filed returns for prior years (because, for example, there was no tax payable) would be permitted to establish their entitlement to contribution room by filing a return for those years or by other means acceptable to the CRA.The tax payable for excess contributions to a tax-free savings account is 1% per month, for any month in which there is an excess amount at any time in the month.  This means there will be a tax payable even if the excess amount is withdrawn in the same month in which it is contributed.There is no deadline for contributions to a TFSA, as the unused contribution room is carried forward into the next year.  However, a withdrawal in any year does not increase the TFSA room until the following calendar year.  Thus, if you are thinking of making a withdrawal close to year end, make sure it is done by December 31st, in order to have the withdrawal amount added back to the TFSA room sooner.Tax Tip:  If you have a loss on your investment, don't transfer it to your TFSA.

1 Comment to Tax-free savings account (TFSA) contribution rulesIncome:

Comments RSS
Agri Tips on October-18-13 3:11 AM
I've always enjoyed reading your blog and this particular post was especially good. Thanks for sharing it.
Reply to comment

Add a Comment

Your Name:
Email Address: (Required)
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment