The CRA Increased the TFSA Contribution Limit for 2021: Top Stocks to Buy (2024)

FAQs

What is the 2021 TFSA contribution limit? ›

You can track your TFSA contribution room using the Canada Revenue Agency's (CRA) My Account self-service portal. Simply log into My Account and you'll be able to: check your TFSA contribution room. make sure your TFSA is registered with the CRA.

The Tax-Free Savings Account (TFSA) contribution limit has increased to $7,000 in 2024 from $6,500 in 2023. Every year, the Canada Revenue Agency (CRA) declares the annual TFSA contribution limit, which is indexed to inflation and then rounded to the nearest $500. What else should you know? Read on.

The Canadian government restricts the amount of money you can contribute to your TFSA each year. This TFSA contribution limit – also called the TFSA dollar limit – changes periodically: it's indexed to inflation and then rounded to the nearest $500. The 2024 TFSA limit is $7,000 per year.

At any time in the year, if you contribute more than your available TFSA contribution room you will have to pay a tax equal to 1% of the highest excess TFSA amount in the month, for each month that the excess amount stays in your account. For more information, see Tax payable on excess TFSA amount.

Any interest income, dividends or capital gains earned in the account are not taxed and withdrawals can be made tax-free. There is an annual TFSA contribution limit, raised to $7,000 for 2024, and any unused contributions from one can year can be carried forward to the next year.

You can withdraw funds from your TFSA any time you want¹ and you don't have to reach a certain age before you withdraw your money. Withdrawals made from your TFSA will be added back to your TSFA contribution room the following year. Your financial institution can help you make withdrawals from your TFSA.

TFSAs have a yearly contribution limit. This means you're only allowed to contribute a certain amount of money into a TFSA every year. And exceeding your limit results in monthly taxation on the excess amount.

The Tax-Free Savings Account (TFSA) contribution limit will increase to $7,000 (from $6,500) for 2024. This new limit means that a taxpayer who has never contributed to a TFSA and has been eligible for one since its inception will have a cumulative contribution room of $95,000.

The Tax-Free Savings Account (TFSA) program began in 2009. It is a way for individuals who are 18 and older and who have a valid social insurance number (SIN) to set money aside tax-free throughout their lifetime. Contributions to a TFSA are not deductible for income tax purposes.

How do I calculate my TFSA limit? ›

The annual TFSA contribution limit for 2024 is $7,000. Your contribution limit starts the year you turn 18 and TFSA's were introduced in 2009. If you didn't contribute to a TFSA between 2009 and 2024 and you were at least 18 in 2009, your total contribution limit could be $95,000.

Yes, you can lose money on a TFSA, but it is easy to avoid losing your money. Typically, people who lose their money on a Tax-Free Savings Account are people who are using it for more volatile investments or people who are over-contributing.

You can-carry forward any unused contribution room into future years indefinitely. For 2024, you can contribute up to $7,000 PLUS any unused contribution room from previous years.

What if you've never contributed to a TFSA before? If you have lived in Canada your entire life and you were 18 or older when the Government of Canada first introduced TFSAs (in 2009) and you've never put money into a TFSA, then your contribution room could be as much as $95,000 (in 2024).

TFSA Contribution Limits

For 2019, they increased the annual contribution limit by $500, to a total of $6,000. It remained there up until 2023 when it was increased to $6,500. In 2024 it increased to $7,000.

Each year, on January 1, your annual contribution room resets. The maximum contribution for 2024 is $7,000. If you over-contribute to your TFSA, you have to pay a tax equal to 1% per month on the excess amount.