Need advice.. overloaded my TFSA

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Mar 21st, 2017 8:44 pm

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Mar 18th, 2017 4:41 pm

superbundance [OP]: Deal Addict; Jul 1, 2006; 1197 posts; 66 upvotes

Mar 18th, 2017 4:41 pm

Need advice.. overloaded my TFSA

I was expecting the CRA to contact me but that has yet to happen.

Can someone enlighten me to the process. Do I have to file my taxes first. Do I need to contact them or will I just get a bill in the mail?

I have no idea how this works?

12 replies

Mar 18th, 2017 6:39 pm

dvd5: Sr. Member; Sep 4, 2007; 561 posts; 52 upvotes; Orange Key holder in…

Mar 18th, 2017 6:39 pm

If you are absolutely certain that you over contributed, then you need to take the excess back out. CRA won't contact you until they are ready to access you penalty and it is accumulating.

Have you contacted the FI where you stash your TFSA? I hope they are not locked in.

Mar 19th, 2017 11:25 am

superbundance [OP]: Deal Addict; Jul 1, 2006; 1197 posts; 66 upvotes

Mar 19th, 2017 11:25 am

I am 12k over since Dec 2016 and 6500k in 2017. I moved stock into my TFSA... I bought the stock for a 3.95 and a few days later it was 5.30. I calculated the move at 3.95. My plan was to have move the stock right away but I had to wait for the stock settle to make the move which I did not know.

I don't mind paying the penalty since the stock is 6.50 range now and company looks to have a bright future. I just want some feedback on how to get ball rolling with the CRA.

Mar 19th, 2017 12:01 pm

toolioiep: Member; Dec 7, 2007; 220 posts; 70 upvotes; 0

Mar 19th, 2017 12:01 pm

superbundance wrote: ↑
Mar 19th, 2017 11:25 am
I am 12k over since Dec 2016 and 6500k in 2017. I moved stock into my TFSA... I bought the stock for a 3.95 and a few days later it was 5.30. I calculated the move at 3.95. My plan was to have move the stock right away but I had to wait for the stock settle to make the move which I did not know.

I don't mind paying the penalty since the stock is 6.50 range now and company looks to have a bright future. I just want some feedback on how to get ball rolling with the CRA.

You might mind paying the penalty as it's 1% a month on the over contribution- and 100% of the gains made if the CRA determines that the over contribution was deliberate or done knowingly.

Mar 20th, 2017 1:00 pm

craigslist123: Jr. Member; Nov 4, 2012; 127 posts; 8 upvotes

Mar 20th, 2017 1:00 pm

I over contributed last year, after realizing I quickly took the money out and mailed them a letter explaining what happened. I still did not hear from the CRA or received any sort of fees/charges (Hopefully, I won't)

Mar 20th, 2017 5:18 pm

atomiton: Deal Addict; Dec 14, 2007; 1969 posts; 745 upvotes

Mar 20th, 2017 5:18 pm

If it was accidental and you correct it quickly, there's a good chance of getting the fees waived. When the TFSA first came in, my FA didn't fully explain to me on how it worked. I withdrew from another and recontributed. Got a letter from CRA. Talked to FA and he drafted up a letter that I signed and he sent away. They waived the fees. I can't remember who you'd send that to.

I'd love to write history... in advance.
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Mar 20th, 2017 7:05 pm

don242: Deal Fanatic; Nov 19, 2004; 7120 posts; 896 upvotes; Cambridge, ON

Mar 20th, 2017 7:05 pm

Take the excess out immediately. What are you waiting for? It is 1% per month in any month where you are over even for a day. So already you owe $315.

Just add, because it may look deliberate since you are enjoying the gains of the stock instead of withdrawing the excess, they may charge you a penalty of 100% of the capital gains on top of the 1% per month.

Mar 20th, 2017 7:25 pm

jerryhung: Deal Expert; Sep 19, 2004; 19814 posts; 2935 upvotes; Waterloo

Mar 20th, 2017 7:25 pm

CRA is slow, I know they contacted a family member 2 years after the over contribution, and as expected every year after that is also delayed

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Mar 20th, 2017 8:17 pm

bigjee: Deal Addict; Sep 14, 2008; 1511 posts; 199 upvotes; Winnipeg

Mar 20th, 2017 8:17 pm

Call the number on cra website. Thats the best way to get a hold of them.

http://www.cra-arc.gc.ca/cntct/phn-eng.html#h1

They will ask you to fill an over contribution form. Take that to the financial institution that has your funds. They will ask you to withdraw from your tfsa in the near future.

Mar 21st, 2017 12:44 am

4seasonscentre: Sr. Member; Feb 11, 2009; 833 posts; 138 upvotes

Mar 21st, 2017 12:44 am

I accidentally over contributed in 2016 too.

I didn't realize it until I was comparing what my 2017 limit was with what the CRA calculated it to be in the My CRA portal.
I then realized I missed a deposit transaction in 2016. I went over about $1200 in October.

Therefore in January with the new amount provided for 2017 I was no longer over.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... t-eng.html

I filled out the TFSA return form and the Schedule A along with a cheque for about $30.

I have learned my lesson.

Mar 21st, 2017 6:52 am

a2peng: Newbie; Apr 14, 2015; 13 posts; 2 upvotes; Waterloo, ON

Mar 21st, 2017 6:52 am

I am a bit confused now guys. Let's say I have a total contribution room of $50000 in my TFSA for 2017. Can't I use all that money to purchase stocks and ETF (~$49500) and leaving ~$500 for commission or other fees? Even if my portfolio grows to above $50,000 in 2017, is that okay? Or do I need to withdraw any gains above $50000 out to a non-registered account to avoid getting slapped with the 1% ? Thanks.

Mar 21st, 2017 7:19 am

don242: Deal Fanatic; Nov 19, 2004; 7120 posts; 896 upvotes; Cambridge, ON

Mar 21st, 2017 7:19 am

a2peng wrote: ↑
Mar 21st, 2017 6:52 am
I am a bit confused now guys. Let's say I have a total contribution room of $50000 in my TFSA for 2017. Can't I use all that money to purchase stocks and ETF (~$49500) and leaving ~$500 for commission or other fees? Even if my portfolio grows to above $50,000 in 2017, is that okay? Or do I need to withdraw any gains above $50000 out to a non-registered account to avoid getting slapped with the 1% ? Thanks.

Gains (and losses) within the tfsa are fine. You don't need to withdraw them.

Mar 21st, 2017 8:44 pm

a2peng: Newbie; Apr 14, 2015; 13 posts; 2 upvotes; Waterloo, ON

Mar 21st, 2017 8:44 pm

don242 wrote: ↑
Mar 21st, 2017 7:19 am
Gains (and losses) within the tfsa are fine. You don't need to withdraw them.

Thanks Don!

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