- You can only contribute to your own TFSA
- Contribution limit is not tied to income
|$5,500||2014 & 2013|
|$5000||2012 - 2009|
Don’t overdo it. Take care not to invest beyond your own contribution limit. For each month that an over-contribution remains in your TFSA, Canada Revenue Agency (CRA) will charge a penalty tax of 1% per month on the excess amount. Just be sure that you don’t contribute more than your yearly limit allows.
Unused Contribution Room
- If you don’t maximize your contribution in a given year, the remaining ‘contribution room’ accumulates and can be used in future years
- CRA will confirm your contribution room on your Notice of Assessment
- Unused contribution room is carried forward indefinitely, so you can ‘catch-up’ in future years
- You can take money out of your TFSA. The withdrawal will increase your contribution room for the following year
Example: In 2009, Sarah invests $5,000 in a TFSA. Later that year, she withdraws $3,000 for a vacation, but her plans change and she is not able to go. Since Sarah has no unused TFSA contribution room left, she will have to wait until 2010 to deposit the $3,000 back into her TFSA.