Canadians have been contributing to tax-free savings accounts (TFSA) since 2009, enjoying tax-free investment growth. Did you know that it’s possible to overcontribute and be subject to penalties?
Excess contributions can occur, for example, when your TFSA is set up for pre-authorized contributions and you make additional contributions without verifying the amount of room you have available. This can also be the case when you have multiple TFSAs with different financial institutions and you are not tracking the contributions you are making to all accounts. You can avoid penalties by staying within the TFSA contribution room available to you.