Are you saving for a car or a dream vacation? A TFSA is a great way to save tax-free. The TFSA is a way for individuals who are 18 and older and have a valid social insurance number (SIN) to save money and withdraw it tax-free throughout their lifetime.
Whether you already have a TFSA or are thinking about opening one soon, it is important to remember that overcontributing to your TFSA can result in a tax of 1% for every month that the excess contributions stay in your account(s).
Understanding your contribution room
There is a limit on how much you can put in your TFSA and that limit is made up of three things:
- the annual TFSA dollar limit (the TFSA dollar limit for 2024 is $7,000)
- any unused contribution room from previous years
- any withdrawals you made during the previous year (excluding direct transfers from another TFSA)
Here’s how to stay within your limit:
- Step 1: Check My Account for the TFSA limit for the year and your unused contribution room from the previous year.
- Step 2: Check your TFSA transactions with your financial institution to see how much you have already contributed this year. Remember that if you have more than one TFSA, your total contributions to all TFSAs will need to stay within your limit.
For more information, check out TFSA contributions.
Information source from Canada Revenue Agency (CRA)
A First Home Savings Account (FHSA) lets you save for a qualifying home with tax-free growth and tax-deductible contributions, making it a great option for potential first-time home buyers. But, it’s...
The CRA accepts many payment methods. Find out which way to pay works best for you. To see what options are available for a specific payment you are making, answer a few questions at CRA website below...
Effective June 17, 2024, individuals with a SIN that starts with the number 9 can now use the Business Registration Online service to register and instantly obtain a business number and a GST/HST...
When it comes to filing an income tax and benefit return, most individuals choose to file online because it’s fast, easy, and secure. This tax season, more than 95% of all tax returns were filed...
Did you know that you can log in to our secure EFILE web service whenever it’s convenient for you? It’s easy!1) Sign in to the secure site with your EFILE number and password.2) Click on the...
If you’re self-employed, tax season can feel overwhelming, but the Canada Revenue Agency (CRA) is here to help you! Whether you’re a sole proprietor, freelancer, or running a small business...
The Canada Revenue Agency (CRA) is making it easier for newcomers arriving in Canada to apply for benefit and credit payments. Newcomers can now apply online, without mailing in the forms. It’s...
Did you receive a letter from the Canada Revenue Agency (CRA) telling you that you owe money? CRA understands this can feel stressful, but they can work with you to resolve your debt. Let CRA help...
The Canada Revenue Agency (CRA) considers you a newcomer to Canada for the first year you are a resident of Canada for income tax purposes. Newcomers to Canada can apply to get benefit and credit...