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Figuring Out TFSA Contribution

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  • Oct 30th, 2015 2:02 pm
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[OP]
Deal Fanatic
Jul 8, 2010
7436 posts
482 upvotes
York

Figuring Out TFSA Contribution

Hi guys, quick question about my remaining TFSA contribution limit. I know the limit has been increased to $10,000 a year. I'm confused how much I can invest this year. I was under 18 when the program started, I added and withdrew funds over the last few years, and with this new $10,000 limit it's become even more confusing. All I know is I haven't been penalized because I never went over the $5,000/$5,500 limits in previous years. Called CRAs automated telephone banking and they gave me a number of around $30,000. I'm guessing it's so large because of the new $10,000 limit?
22 replies
Deal Addict
Jan 2, 2015
1633 posts
638 upvotes
Toronto, ON
That's right.

It was $5000 per year from 2009 to 2012, $5500 in 2013 and 2014, and $10,000 in 2015 (note that Royal Assent probably hasn't been given yet, but it's a done deal).

Withdrawing makes it harder to keep track of your amount. I drew up a simple chart, based on RC343 chart here: http://www.cra-arc.gc.ca/E/pbg/tf/rc343/README.html

I recreated it in Open Office and took some stuff out. To keep things easy, I always contribute in even thousands and try to withdraw in even thousands too. (So far I've only withdrawn to open new TFSAs. I have a crazy number.)
[OP]
Deal Fanatic
Jul 8, 2010
7436 posts
482 upvotes
York
FoFai2015 wrote: That's right.

It was $5000 per year from 2009 to 2012, $5500 in 2013 and 2014, and $10,000 in 2015 (note that Royal Assent probably hasn't been given yet, but it's a done deal).

Withdrawing makes it harder to keep track of your amount. I drew up a simple chart, based on RC343 chart here: http://www.cra-arc.gc.ca/E/pbg/tf/rc343/README.html

I recreated it in Open Office and took some stuff out. To keep things easy, I always contribute in even thousands and try to withdraw in even thousands too. (So far I've only withdrawn to open new TFSAs. I have a crazy number.)
Thanks, think I figured it out. From what I can see, I kept putting in the max. In 2014 I put in $5,500. Withdrew $5,500 at the end of the year and put in $11,000 in 2015 ($5,500 from 2014 that I withdrew and $5,500 for 2015). Now I figure I have $4,500 left because $10,000 - $5,500. Or can I not put any more into the TFSA until the $10,000 thing becomes actual law?
Deal Addict
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Oct 9, 2005
1105 posts
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Toronto
http://business.financialpost.com/perso ... a-for-2015
“We have received confirmation from the Canada Revenue Agency that, while the legislation is subject to Parliamentary approval, consistent with its general approach for proposed income tax changes, it is administering the measure on the basis that $10,000 is the new TFSA annual contribution limit. Clients may therefore proceed to contribute to their TFSA based on this proposed law,” said Golombek.
In any case, the budget is law now: http://www.fin.gc.ca/n15/15-062-eng.asp.
Intricated
[OP]
Deal Fanatic
Jul 8, 2010
7436 posts
482 upvotes
York
Great, thanks!

My mistake, I deposited $5,500 this year, then WITHDREW $2,500. I'm assuming I have $4,500 left in contribution amount? I know I can't contribute what I withdrew THIS year ($2,500) but I still have room for $4,500 left, correct?
Deal Addict
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Oct 9, 2005
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Toronto
Assuming you used up all your starting contribution room in 2014, and made no withdrawals in 2014, then yes, you had $10k to work with in 2015, you already used up $5.5k, and since the $2.5k withdrawal this year cannot be recontributed until next year, you have $4.5k room left.
Intricated
Member
Jun 29, 2015
259 posts
29 upvotes
Toronto, ON
the best way to figure it out is to check with the CRA who can tell you how much room you have as of Dec 31, 2015.

That plus this year's 10k is how much you can deposit for 2015.

this saves the work of figuring out what you may have deposited and withdrew (including interest amts) over the last 5 years.
Sr. Member
Jun 5, 2015
969 posts
19 upvotes
Toronto, ON
LetsGoBJs wrote: the best way to figure it out is to check with the CRA who can tell you how much room you have as of Dec 31, 2015.

That plus this year's 10k is how much you can deposit for 2015.

this saves the work of figuring out what you may have deposited and withdrew (including interest amts) over the last 5 years.
Actually, if you register an online account with CRA, when you log in you will see all the details about how much you can contribute to your RRSP and TFSA, including the exact amounts and how they are calculated, as well as the amounts for previous years.
Deal Addict
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Oct 9, 2005
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CRA does not guarantee the accuracy of the TFSA limit tracking they have because TFSA issuers are not obligated to report a TFSA holder's transactions more than once a year in February. In the OP's case, his 2.5k withdrawal this year may not be registered with the CRA yet, so checking with them for his current limit would not be complete.

The onus remains on the TFSA holder to keep track of their TFSA limit.
Intricated
Sr. Member
Jun 5, 2015
969 posts
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Toronto, ON
Intricated wrote: CRA does not guarantee the accuracy of the TFSA limit tracking they have because TFSA issuers are not obligated to report a TFSA holder's transactions more than once a year in February. In the OP's case, his 2.5k withdrawal this year may not be registered with the CRA yet, so checking with them for his current limit would not be complete.

The onus remains on the TFSA holder to keep track of their TFSA limit.
I didn't know that... Thanks! Fortunately I have only got less than 3 years of TFSA history, two of which were entirely via employer-sponsored TFSA, so it's been relatively easy to keep track of -- but now that I start managing my TFSA this year, I realized how much a rip-off it was with the employer-sponsored group TFSA, the fees are crazy high comparing to ETFs, even some mutual funds
Sr. Member
Dec 26, 2011
775 posts
390 upvotes
Intricated wrote: CRA does not guarantee the accuracy of the TFSA limit tracking they have because TFSA issuers are not obligated to report a TFSA holder's transactions more than once a year in February. In the OP's case, his 2.5k withdrawal this year may not be registered with the CRA yet, so checking with them for his current limit would not be complete.

The onus remains on the TFSA holder to keep track of their TFSA limit.
I'm wondering regarding this what would happen if the CRA shows you having much more room then what is actually available according to your records?

I've looked at my TFSA records online and I think one of my institutions did not actually report one of my large lump sum contributions. This is from several years ago.
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Oct 9, 2005
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Most stories I've seen about misreporting by TFSA issuers work against the TFSA holder (e.g. reported a qualifying transfer as a withdrawal/contribution, misclassifying an investment as unqualified), so obviously it's in the holder's best interests to resolve the reporting issue.

When it's a neutral/favourable issue, you may not want actively reconcile the records, but I would suggest against taking advantage of the disconnect by contributing more than you genuinely can. If the CRA records get updated and push you above your limit, they may come for you for the interest fee (1% of the overcontributed amount per month) backdated to when you took advantage.
Intricated
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Feb 9, 2013
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I have seen a few web brokers' website says we can contribute $10,000 this year.
TDW website doesn't say anything, but I would like to make my 2015 contributions in TDW as I have already contributed $5500 to it earlier in the year. Then, can I therefore contribute extra $4500 to total $10,000 in TDW?
Deal Addict
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Oct 9, 2005
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Broker doesn't matter, your TFSA limit is across all issuers. Unless you have pre-2015 transactions impacting your limit to start the year, then yes, one who maxed their starting 2015 contribution room of 5.5k at the beginning of the year and have not made any other moves since has another 4.5k of new 2015 room that may be contributed now.
Intricated
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Feb 19, 2010
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arandomguy wrote: I'm wondering regarding this what would happen if the CRA shows you having much more room then what is actually available according to your records?

I've looked at my TFSA records online and I think one of my institutions did not actually report one of my large lump sum contributions. This is from several years ago.
The onus is always on the taxpayer, not CRA or reporting institutions, for you to know where you're at. If you're thinking of hanging this on either of them, you're barking up the wrong tree.
Deal Expert
Mar 25, 2005
22384 posts
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Conquistador wrote: The onus is always on the taxpayer, not CRA or reporting institutions, for you to know where you're at. If you're thinking of hanging this on either of them, you're barking up the wrong tree.
For first time mistakes, there usually is some wiggle room. Usually being the operative word.
Newbie
Sep 16, 2012
2 posts
not entirely clear about contribution and withdrawal. seems one can't withdraw what one has put in in the same year without tax consequences. Am I correct in assuming this only applies if one has maxed out ones contributions? say, if in jan 2015 i only had a meagre $6,000 in the pot, in may 15 i put in $10K. Won't i be allowed to put in 10K in dec 15 without tax consequences. Also can one trade in individual stocks in a tfsa acc with say Questrade or TD? Any fee on such an account besides the stock trade? sorry if this info is already in the forum but i didnt see it.
Sr. Member
Oct 11, 2010
993 posts
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Charlottetown
may be a good idea to sign up for a CRA account as well if you don't have one all ready. You can check your TSFA contribution room online under your CRA account. As some have stated, it may be delayed but it should give you a rough idea as to what your contribution room is within a year
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Jul 3, 2002
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frugalsearcher2012 wrote: not entirely clear about contribution and withdrawal. seems one can't withdraw what one has put in in the same year without tax consequences. Am I correct in assuming this only applies if one has maxed out ones contributions? say, if in jan 2015 i only had a meagre $6,000 in the pot, in may 15 i put in $10K. Won't i be allowed to put in 10K in dec 15 without tax consequences. Also can one trade in individual stocks in a tfsa acc with say Questrade or TD? Any fee on such an account besides the stock trade? sorry if this info is already in the forum but i didnt see it.
Let's assume you were 18 when the TFSA came into being in 2009. As of 2015, you would have $41,000 of contribution room.

You state "If in Jan 2015 I only had a meager $6000 in the pot" - I am assuming this to mean that you are giving the hypothetical situation that as of Jan 2015, you have contributed a total of $6000 to your account (no matter how it was spread over previous years). If that's the case, you've still got $35,000 left you can cram in there.

If you want to put $10k in there on Dec 15, 2015, then go right ahead. That would still leave you with $25,000 of contribution room.

As for withdrawals - if you take anything out in a given year, that headroom does not become available until the next calendar year. Let's assume that right now you've completely maxed out your TFSA and have made $41,000 worth of contributions up until today Oct 29, 2015. Something happens, and you decide to withdraw $5,000 from your account. You CANNOT return that $5,000 until NEXT year. Starting in 2016, you'd have $10,000 available from 2016's contribution limit, PLUS the $5,000 you withdrew, for $15,000 total.

LOL now watch you guys destroy me... but I'm pretty sure that's how things work!
Rock it.
Newbie
Sep 16, 2012
2 posts
tks so much to jfall and chdude3 - answered the contribution and withdrawal questions clearly. looks like if one had contributed the max ($41,000) and made money (say $9,000) one can take out $50k Dec 1015, tax free, and in the new year, 2016 could contribute $41,000 plus $10,000.

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