TFSA over contribution payment
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Thread: TFSA over contribution payment

  1. #1
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    TFSA over contribution payment

    Does someone know how to declare over contributions of TFSA? I am using ImpôtExpert online, but cannot figure out where to place the amount of over contribution.

    I called CRA to ask for that and they told me to wait 15 days to receive a slip since March 1, but still don't get any slip and called again and they told to use this form http://www.cra-arc.gc.ca/E/pbg/tf/rc...-a/README.html and submit it to CRA while I can send a check with excess or pay it through a deposit within my online banking account.

    Someone has already declared this can confirm procedure please? Very appreciated.


  2. #2
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    The articles I have seen say to fill out CRA form RC-243.
    http://www.moneysmartsblog.com/tfsa-...n-penalty-fix/
    http://www.moneysense.ca/columns/app...ion-penalties/


    I have been avoiding over-contributing so I haven't gone through the form/process.


    Cheers

  3. #3
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    Thanks for your reply. I've been looking for more info on the Internet. However I called again to CRA and they said that I don't have any penalty to pay taxes on the TFSA. Maybe because the money was withdrew in a couple of months when I realized the excess, but I still can see in negative my resulting contribution room for 2016 in my online account of the CRA and in 2017 I have more unused contribution room.

    I read that the limit to pay any TFSA amount is until June 30 of this year (for tax return 2016). Am I right? If not, I should write a waiver letter immediately.

    Hope I can be forgiven by the govt for this even if the bank agent advised me to invest more than I could and I didn't know so much about TFSA at the moment. I read also in the CRA's website that knowing the contribution room is a particular's responsibility.
    Last edited by Tetsujin; 2017-04-25 at 12:36 PM.

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  5. #4
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    Quote Originally Posted by Tetsujin View Post
    Thanks for your reply. I've been looking for more info on the Internet. However I called again to CRA and they said that I don't have any penalty to pay taxes on the TFSA. Maybe because the money was withdrew in a couple of months when I realized the excess, but I still can see in negative my resulting contribution room for 2016 in my online account of the CRA and in 2017 I have more unused contribution room ...
    Weird ... though with the number of people who has trouble understanding the "put back withdrawals next year" that was followed by penalties being waived - there may be a possibility CRA has a bit of leeway, especially as you dealt with the over amount quickly.


    Quote Originally Posted by Tetsujin View Post
    ... I read that the limit to pay any TFSA amount is until June 30 of this year (for tax return 2016). Am I right? If not, I should write a waiver letter immediately.
    I have never hear of a "limit". Plus the people back in 2009 who over-contributed didn't get their letters until around June 2010 from the articles I recall in 2010. The 2011 article for 2010 penalties is expecting people to be receiving letters in Aug 2011.
    http://www.financialpost.com/m/What+...016/story.html



    Quote Originally Posted by Tetsujin View Post
    ... Hope I can be forgiven by the govt for this even if the bank agent advised me to invest more than I could and I didn't know so much about TFSA at the moment. I read also in the CRA's website that knowing the contribution room is a particular's responsibility.
    Like other areas, CRA has some discretion. After all, it's far more efficient for CRA to notice you dealt with it immediately so that a letter from them, an application to waive the penalties by you and then granting the waiver to end up in the same spot (i.e. no penalties).


    Now if you keep repeating the mistake and/or the overage amounts become large over the multiple times - then any goodwill / willingness to waive a small penalty on CRA's part likely vanishes.


    Cheers

  6. #5
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    Very interesting article you shared. Thanks. I don't know if I should send my waiver in advance or to wait an assessment letter.

    In the meantime look at this:


    ...
    According to an internal CRA memo made public in December under the Access to Information Act, the CRA is considering some changes to the TFSA assessing system for 2016. The memo states that any taxpayers who exceed their TFSA contribution limit for the first time, will be sent a warning letter. If they still fail to remove the excess amount from their TFSA, they will be subject to an automatic assessment of tax on the excess contributions.
    ...

    Source: http://business.financialpost.com/pe...n-to-your-tfsa

    However I've never received such warning.

  7. #6
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    This may also be influenced by the larger numbers that didn't understand the one year year (I seem to recall something like 100K in 2010 but would have to check).

    After years of data, they may be seeing that lion's share are ones that aren't worth a lot where the penalty likely would be waived so that a warning letter might save time/effort/hassle.


    Cheers


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