Take A Fresh Approach to Your Savings with a Tax Free Savings Account at Sandhills Credit Union.
TFSA Contribution Limit
Contribution to a TFSA may only be made by the Holder and the amount is not tied to the income of the Holder.
- The Holder can contribute up to $6,000 per year.
- Contributions are not tax deductible.
- The Holder is responsible for ensuring the maximum contribution limit is not exceeded. An excess contribution will result in a penalty tax of 1% per month for each month that the excess contribution amount remains in the TFSA.
TFSA Unused Contribution Room
When a TFSA Holder contributes less than the maximum contribution limit, the difference is referred to as ‘unused contribution room.’
- Unused contribution room will accumulate each year.
- Unused contribution room is carried forward indefinitely, allowing the Holder to ‘catch up’ by contributing more than the maximum contribution limit in a future year.
- A TFSA withdrawal will increase the contribution room for the year after withdrawal. As a result, when amounts are withdrawn from a TFSA they can be re-contributed in the future when funds become available.
- Canada Revenue Agency will confirm the contribution room on the annual Notice of Assessment
- TFSA Holder may withdraw funds at any time; withdrawals may be restricted by investment terms.
- Withdrawals are not reported as taxable income and are not subject to income tax.
Talk to us today about your Tax Free Savings Account at Sandhills Credit Union.