The TFSA is a tax-advantaged registered savings vehicle. Contributions to a TFSA are not tax-deductible, but investment income earned grows tax free. A wide variety of products are available within a TFSA and there are no penalties or tax consequences for making withdrawals, nor do withdrawals impact your eligibility for income-tested benefits or credits. This makes the TFSA a suitable vehicle for many types of savings objectives.
If you have money in non-registered accounts such as open investment or bank accounts, it may make sense for you to maximize your contributions to your TFSA. For your convenience, contributions to your TFSA can be made at any point during the year and/or we can help set up schedule monthly deposits.
If you have never contributed to a TFSA and you have been over the age of 18 since 2009, in 2023 your total unused room will be $88,000. Otherwise, your total TFSA contribution room can be calculated by adding:
- Your 2023 contribution limit of $6,500 plus
- Any unused TFSA contribution room from previous years plus
- Any withdrawals made from the TFSA in previous year
As there are penalties for over-contributing to your TFSA, we recommend that you contact the Canada Revenue Agency to find out exactly what your 2023 contribution limit is.
Contact us today if you would like to discuss setting up a TFSA, contributing to your existing TFSA or any other financial planning needs you have.