Tax-Free Savings Account (TFSA) contribution room accumulates every year, even if you haven't opened a TFSA. If you are a Canadian resident, your contribution room begins accumulating from 2009 or from the year in which you turned 18. So, if you open a new TFSA in 2024and have never contributed to a TFSA elsewhere, you would have total available contribution room of$95,000if you were 18 or older in 2009.
If at any time in the calendar year you are 18 years of age or older and a resident of Canada with a Social Insurance Number, you are eligible to open a TFSA and contribute up to the limits below.
Note that the age of majority is 19 in Newfoundland and Labrador, New Brunswick, Nova Scotia, British Columbia, Northwest Territories, Yukon and Nunavut. Contribution room starts at age 18, however, regardless of your province of residence. So if you're a resident of Newfoundland, you can still contribute the same amount as a resident of Ontario – you just need to wait until age 19 to open the account.
| Year | Annual TFSA Contribution Limit |
| 2009 | $5,000 |
| 2010 | $5,000 |
| 2011 | $5,000 |
| 2012 | $5,000 |
| 2013 | $5,500 |
| 2014 | $5,500 |
| 2015 | $10,000 |
| 2016 | $5,500 |
| 2017 | $5,500 |
| 2018 | $5,500 |
| 2019 | $6,000 |
| 2020 | $6,000 |
| 2021 | $6,000 |
| 2022 | $6,000 |
| 2023 | $6,500 |
| 2024 | $7,000 |
| Total Contribution Room for 2009-2024:$95,000 | |
Note that investment income earned in your TFSA and changes in the value of your investmentsdo not affectyour TFSA contribution room for current or future years.
Tracking Your TFSA Contributions
It's important to keep track of all your TFSA contributions, in the current year and in past years, so that you don't contribute above your maximum. That's important since over-contributions are subject to a monthly tax of 1 per cent for each month the excess amount stays in your TFSA. There may also be significant penalties on earnings or increases in value attributed to deliberate excess contributions.
- You can check your contribution room with CRA'sMy Account. Be aware that any contributions made or withdrawn from a TFSA in theprioryear may not be reflected in your available current-year contribution room until after the end of February. Any transactions made in the current year willnotbe included.
- If you've withdrawn from your TFSA this year, a handy formula for checking what your next year's contribution room is:
Unused TFSA contribution room to date + total withdrawal made this year + next year's TFSA's contribution limit= TFSA contribution room at the beginning of next year.
- If you have multiple TFSAs, perhaps at different financial institutions, you might consider transferring in some or all of your assets to your RBC Direct Investing TFSA. This can make it easier to track your contributions and see your performance and holdings any time, at a glance.
To open your TFSA
If a TFSA is right for you, you can open your accounthere.
The information provided in this article is for general purposes only and does not constitute personal financial or tax advice. Please consult with your own professional advisor to discuss your specific financial and tax needs.
Last updated: December 2023
Next:What Investments Can I Hold in My TFSA?
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FAQs
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.
Is there a limit to how much you can put in TFSA? ›
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.
How do I calculate my maximum TFSA contribution room? ›
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.
What is an example of a TFSA contribution? ›
Let's say, for example, your TFSA contribution limit for 2024 is $8,000. You contribute $6,000 in March, leaving you with a contribution room of $2,000 for the rest of the year. If you withdraw $4,000 in October, your contribution room does not change until 2025.
How much does the average Canadian have in a TFSA? ›
Also, the same survey showed that overall balances have risen by 53.44% from five years ago. The mean TFSA balance in 2023 is $41,510 versus $27,053 in 2018. For 2024, the contribution limit is $7,000, while the total possible contribution room (cumulative from 2009) is $95,000.
What are the 5 mistakes you must avoid in a TFSA? ›
Avoid these mistakes when managing your TFSA
- Overcontributing to your account. ...
- Naming spouse a beneficiary instead of successor holder. ...
- Holding investments that produce foreign income. ...
- Not recognizing how market gains and losses impact your future contribution room. ...
- Choosing non-qualified investments.
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.
How do I know my TFSA limit? ›
Your TFSA contribution room information can be found by using one of the following services:
- My Account for Individuals.
- MyCRA at Mobile apps – Canada Revenue Agency.
- Represent a Client if you have an authorized representative.
- Tax Information Phone Service (TIPS) at 1-800-267-6999.
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.
Can I put 50k in my TFSA? ›
Your TFSA lifetime contribution limit is $95,000. Your ongoing contribution amount. There is new contribution room every year. For 2024, you can contribute up to $7000 plus any unused contribution room from previous years.
No Income-Tax Reduction:
Unfortunately, TFSA contributions can't be used to lower your taxable income. This means there is no way to decrease your income tax when contributing to a TFSA. For high income earners this makes an RRSP more appealing.
What is not allowed in TFSA? ›
A type of investment that is not intended to be allowed in a TFSA. The full details of what is prohibited are complex, but generally investments in a business where you own at least 10% of the business or investments where you are not at arm's length from the recipient of the investment are prohibited.
How does a TFSA work for dummies? ›
With TFSAs, you pay income tax on the money you invest when you earn it, but you do not pay taxes on the returns that accrue within the TFSA, not even when you withdraw them.
What is the US equivalent of a TFSA? ›
The Canadian Registered Retirement Savings Plans and the Tax-Free Savings Account are similar to U.S. traditional and Roth IRAs. Canadian retirement accounts have more generous contribution limits and fewer distribution limits than American accounts.
How much can I put in my TFSA if I have never contributed? ›
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).
What is a good TFSA balance? ›
For the lowest income group—people earning less than CAD 5,000—the average TFSA balance is about CAD 17,000. For people earning between CAD 15,000 and CAD 20,000, the average TFSA balance is about CAD 21,000. TFSA balances rise to about CAD 60,000 on average for people earning more than CAD 250,000.
How much can you contribute to TFSA over time? ›
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 is the highest TFSA balance? ›
Cumulative TFSA Contribution Room By Age
Someone born in 1991 or earlier, who turned 18 in 2009 or earlier, will have the highest cumulative TFSA contribution room at $95,000 in 2024.
How much is too much trading in TFSA? ›
At one extreme, if you buy or sell a stock once a month there should be no problem. At the other extreme, if you are trading almost every day and holding stocks for only a few days at a time, that will be considered carrying on business and the TFSA will be taxed. So be careful about this!
