Investing

Need advice.. overloaded my TFSA

  • Last Updated:
  • Mar 21st, 2017 8:44 pm
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[OP]
Deal Addict
Jul 1, 2006
1197 posts
66 upvotes

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
Sr. Member
User avatar
Sep 4, 2007
553 posts
49 upvotes
Orange Key holder in…
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.
[OP]
Deal Addict
Jul 1, 2006
1197 posts
66 upvotes
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.
Member
Dec 7, 2007
212 posts
66 upvotes
0
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.
Jr. Member
Nov 4, 2012
117 posts
8 upvotes
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)
Deal Addict
User avatar
Dec 14, 2007
1806 posts
647 upvotes
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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Deal Fanatic
User avatar
Nov 19, 2004
7099 posts
886 upvotes
Cambridge, ON
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.
Deal Addict
User avatar
Sep 14, 2008
1457 posts
182 upvotes
Winnipeg
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.
Sr. Member
Feb 11, 2009
824 posts
135 upvotes
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.
Newbie
Apr 14, 2015
13 posts
2 upvotes
Waterloo, ON
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.
Deal Fanatic
User avatar
Nov 19, 2004
7099 posts
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Cambridge, ON
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.
Newbie
Apr 14, 2015
13 posts
2 upvotes
Waterloo, ON
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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