# TFSA Limit



## newfoundlander61 (Feb 6, 2011)

Started one early this year and so far have put $5400 in. Can I put more in this year due to not having maxed out since TFSA's started?


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## wendi1 (Oct 2, 2013)

Yup. Assuming you're 19 or older. Contribution room remains whether you use it or not. $5500 for this year, $5000 last year, back to 2009

http://www.tfsa.gc.ca/


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## Siwash (Sep 1, 2013)

Heard the fed is toying with increasing the max to $10K per ! That'd be great…


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## Synergy (Mar 18, 2013)

Siwash said:


> Heard the fed is toying with increasing the max to $10K per ! That'd be great…


The limit will remain at $5500 for 2014 ;o(

They have been toying with the idea since 2011 - promises - promises. Fingers crossed for 2016!


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## newfoundlander61 (Feb 6, 2011)

Thanks all, good link. Basically if your TFSA was opened this year you can put the total amount in since the program started. Awesome.


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## Guban (Jul 5, 2011)

Siwash said:


> Heard the fed is toying with increasing the max to $10K per ! That'd be great…


That would be great, but I'm expecting them to cut it back or eliminate it at some point . I can't believe that the government will give up all of that potential revenue. $25,500 is still relatively small, but in years, TFSAs will result in a tremendous loss in tax revenue.

http://rabble.ca/columnists/2011/05/tfsa-attack-our-tax-system


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## Siwash (Sep 1, 2013)

Guban said:


> That would be great, but I'm expecting them to cut it back or eliminate it at some point . I can't believe that the government will give up all of that potential revenue. $25,500 is still relatively small, but in years, TFSAs will result in a tremendous loss in tax revenue.
> 
> http://rabble.ca/columnists/2011/05/tfsa-attack-our-tax-system


So what would happen to money invested in it I wonder?

Why does the left still exist? Such a futile, useless destroyer of wealth… 

I couldn't care less about a $100,000 spent by some senator.. The Conservatives are the only viable party in this country..


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## Eclectic12 (Oct 20, 2010)

newfoundlander61 said:


> Thanks all, good link.


Yes ... it is.



newfoundlander61 said:


> Basically if your TFSA was opened this year you can put the total amount in since the program started. Awesome.


Not to nit pick but to make sure there isn't any confusion for others ... when opening one's first TFSA - one can put the full TFSA contribution room that one has been granted in.

This is important because if one turned 18 in 2012 and has been a Canadian resident for tax purposes both years - the full TFSA contribution room granted would be $5K for 2012 and $5.5K for 2013 for a total of $10.5K. 

I suspect in your case - your were 18+ in 2009 and have been a Canadian resident for tax purposes for 2009 until today, so likely the full $25.5K minus your $5.4K contribution is available to you (or $20.1K is currently available for contribution to a TFSA).

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/lgbl-eng.html


There are two potential wrinkles. The first is that when one is deemed a non-resident for tax purposes, one can keep the TFSA plus there won't be taxes to pay but there also won't be any TFSA contribution room granted during the non-resident time period.

The second is that in some provinces/territories the legal age to enter contract is 19 so that the gov't will grant the TFSA contribution room at 18 but one can't open a TFSA (or make use of the contribution room) until one turns 19.


Also - based on other posts, bear in mind that one can open as many TFSAs as one wants, the TFSA contribution limit applies to *all* TFSAs one has opened (ex. contributions can be split across two TFSA accounts but the total contributed can't exceed the available TFSA contribution room one has been allotated). 


Cheers


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## YYC (Nov 12, 2012)

Guban said:


> That would be great, but I'm expecting them to cut it back or eliminate it at some point . I can't believe that the government will give up all of that potential revenue. $25,500 is still relatively small, but in years, TFSAs will result in a tremendous loss in tax revenue.
> 
> http://rabble.ca/columnists/2011/05/tfsa-attack-our-tax-system


I think it's more likely that marginal tax rates just increase, it's a bad PR move to eliminate things. Easier to just gradually ratchet up the regular tax rates. Oh, and cut programs, that too.


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## AltaRed (Jun 8, 2009)

YYC said:


> I think it's more likely that marginal tax rates just increase, it's a bad PR move to eliminate things. Easier to just gradually ratchet up the regular tax rates. Oh, and cut programs, that too.


I agree with Guban the government will cap the program at some point, i.e. cap the contribution room, for the specific reasons of future tax losses. Perhaps 2015 will be the last year (after the next election), or perhaps at $50k a few additional years later (that would be $100k per couple which for a young couple could translate into potentially $1million 30-40 years down the road). The main reason for having the program in the first place was to encourage more savings, and what is better than non-taxable income?


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## YYC (Nov 12, 2012)

Yeah, I could see a lifetime cap being put in place at some point. What I meant was that I think it's unlikely they would eliminate it completely.


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## AltaRed (Jun 8, 2009)

YYC said:


> Yeah, I could see a lifetime cap being put in place at some point. What I meant was that I think it's unlikely they would eliminate it completely.


Well, no, I cannot imagine they would retroactively take away what they have given. 

As an example, when the lifetime cap gain exemption was taken away in the Feb 1994 budget, unrealized cap gains up to the $100k cap (I think I recall correctly) was grandfathered to closing market prices as of the night of the budget. We all carried those balances forward to be used as a tax credit towards cap gains realized going forward for I believe a 10 year period (to 2004). In other words, it had the same effect as accumulated cap losses today, but with a 10 year time limit for use.


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## wendi1 (Oct 2, 2013)

Apparently most of the people who use the TFSA keep it in a HISA. This is not a pile of revenue we are talking about (not now, anyways).

I agree it might be taken away some day, but not by this lot - they are still waiting for the last person who remembers the income trust debacle to die.


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## Retired Peasant (Apr 22, 2013)

Synergy said:


> The limit will remain at $5500 for 2014 ;o(
> 
> They have been toying with the idea since 2011 - promises - promises. Fingers crossed for 2016!


I recall the promise was $10000 once the deficit was gone.


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## AltaRed (Jun 8, 2009)

Retired Peasant said:


> I recall the promise was $10000 once the deficit was gone.


I think that will be conveniently forgotten, but given the stupidity in promising reductions in the GST and actually doing them.... well, I guess they could be desparate enough for votes.


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## jamesbe (May 8, 2010)

Please give us more tax free "savings"


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## HaroldCrump (Jun 10, 2009)

AltaRed said:


> but given the stupidity in promising reductions in the GST and actually doing them


Why is reducing the GST any more stupid than imposing it in the first place?


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## liquidfinance (Jan 28, 2011)

In the long run I could see the account going two ways

They may impose a life time cap or they could give an indexed linked amount each year to invest tax free. However if you fail to contribute in the given year then you lose that room and withdrawals can't be added back in. 

Only time will tell. One things for sure. What's given with one hand they will taketh away with the other.


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## Eclectic12 (Oct 20, 2010)

liquidfinance said:


> In the long run I could see the account going two ways
> 
> They may impose a life time cap or they could give an indexed linked amount each year to invest tax free.


I can see how a life time cap would change the dynamics and limit the lost tax revenue.

For the second part about an indexed linked amount each year to invest tax free - how is that different than the indexed contribution room being granted today?





liquidfinance said:


> However if you fail to contribute in the given year then you lose that room and withdrawals can't be added back in ...


Since the idea is to get people saving for their retirement (which RRSPs are only partially effective for) - I'm not sure convinced the gov't would want to make the contribution room a "use it or lose it" situation. I can see the "can't add withdrawals back in" as a more likely situation.


Cheers


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## wendi1 (Oct 2, 2013)

HaroldCrump said:


> Why is reducing the GST any more stupid than imposing it in the first place?


It was smart to impose the GST in the first place from a finance perspective (we really needed the money, and manufacturer's tax that it replaced was a job-killing machine), but stupid from an election perspective. This was proved when subsequent Liberal governments did not reduce or eliminate the GST that the Conservatives had implemented.

When "Canada's New Government" promised to reduce the GST, it was smart from an election perspective (even though it reminded people of who had done it in the first place). Following through was stupid from a finance perspective, as we still need the money.

Myself, I think revenue collection is an important function of government. I just resent having to provide revenue through half a dozen different revenue streams, each with its own onerous reporting requirements. 

I also am irritated by random changes to the tax code, but I think that may be the menopause...


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## AltaRed (Jun 8, 2009)

HaroldCrump said:


> Why is reducing the GST any more stupid than imposing it in the first place?


Wendi1 has already addressed this eloquently. To add to this just a bit, a broad based tax is considerably more fair than a targeted tax that is punitive on one economic sector. In other words, why beat up on domestic manufacturing? When duties no longer apply due to free trade deals, how can a TO manufacturer of laundry machines compete with a duty free import? The best taxes are targeted at the consumer level which levels the playing field for the supply sector, import or domestic.


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## Guban (Jul 5, 2011)

wendi1 said:


> I also am irritated by random changes to the tax code, but I think that may be the menopause...


I'm irratated too by the changes in the tax code. It leads to much more complexity over time. I think that there is another thread about this somewhere.

However, the changes are not random. They are targeted to specific areas to improve the economy and society as a whole. Or, they are targeted at certain special interest groups to get more votes. Depends how you look at it.


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