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Canadian money

Annual Tax-free Savings Account Limits

The amount of money you can contribute to your tax-free savings account (TFSA) each year is limited. The annual TFSA contribution limit is shown in the table below. If you contribute more than this annual limit amount to your TFSA, you are subject to financial penalties imposed by the Canada Revenue Agency (CRA).

You may carry over unused TFSA contribution amounts from previous years to increase your TFSA contribution limit for this year.

2014 TFSA Limit$5500
2013 TFSA Limit$5500
2012 TFSA Limit$5000
2011 TFSA Limit$5000
2010 TFSA Limit$5000
2009 TFSA Limit$5000

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You can find your annual TFSA contribution limit on the Notice of Assessment that the Canada Revenue Agency sends you each year beginning with your 2009 assessment.

Frequently Asked Questions

What is a TFSA? A TFSA is a tax-free savings account. Beginning with 2009, Canadians can contribute to a TFSA and the income earned on the amount in the TFSA is tax-free.

What happens if I contribute more than my annual limit to my TFSA? If you contribute more than your annual limit to your TFSA, you are subject to financial penalties imposed by the Canada Revenue Agency (CRA).

If I contribute less than my annual limit to my TFSA, can I carry that amount forward? If you contribute less than your annual limit to your TFSA, you can carry the unused TFSA amount forward to increase your TFSA contribution limit in following years. For example, suppose you contributed $3000 to your TFSA in 2009. The 2009 TFSA limit is $5000 and the 2010 TFSA limit is $5000. You can contribute $7000 to your TFSA in 2010.

Can I transfer money between my TFSAs? You may transfer money between your TFSAs without being charged any tax. Be aware though that some financial institutions will charge a fee for transferring an account.

What is the TFSA contribution deadline? TFSA contributions must be made during the year or by the 60th day of the following year. For example, your 2009 TFSA contribution can be made from Jan 1 2009 up to day 60 of 2010.

Can I withdraw money from my TFSAs? You may withdraw money from a TFSA. The amount withdrawn is not subject to tax. You may recontribute the amount withdrawn at some point in the future.

What happens in the event of death? In the event of death, your spouse or partner can assume the plan if you designate them as the "successor holder". Alternatively, you can designate a beneficiary who will receive the funds upon your death.

What happens in the event of divorce? In the event of divorce, you must submit a form called 'Transfer From a Tax-Free Savings Account (TFSA) to another TFSA on Breakdown of Marriage or Common-Law Partnership' to the Financial Institution in order to transfer TFSA assets.

Will the TFSA contribution limit ever increase? The TFSA contribution limit will increase with the Consumer Price Index (CPI) which is a measure of inflation. The TFSA contribution limit will only increase in increments of $500. As a result, it may take several years for the TFSA contribution limit to increase. The Government of Canada aims to keep inflation at less than 3%. Assuming a rate of inflation of 3%, the next TFSA contribution limit increase would be in 2013. At a rate of inflation of 1%, the next TFSA contribution limit increase would be in 2019.

Is money borrowed to contribute to a TFSA tax-deductible? Money borrowed to contribute to a TFSA is not tax-deductible.