Tax-Free Savings accounts are pretty much just that - a Tax-Free way to watch your money grow! While you can't claim contributions to your TFSA on your taxes, the returns that you accumulate within your TFSA are done so in a sheltered way so that when you make a withdrawal, you don't have to worry about paying taxes! Due to the nature of the funds that are deposited into your TFSA, and the tax-free way they can be withdrawn, there aren't any associated tax slips for TFSA transactions. Just be careful not to over contribute to your TFSA, otherwise you could receive a bill from the CRA! More on that below.
Your contribution room accumulates from the year you turned 18 and were a permanent resident of Canada! Each annual contribution limit since TFSAs were first introduced in 2009 are as follows:
- 2009, 2010, 2011 and 2012 was $5,000.
- 2013 and 2014 was $5,500.
- 2015 was $10,000.
- 2016, 2017, and 2018 was $5,500.
- 2019 was $6,000.
- 2020 is $6,000.
If you're not certain what available contribution room you have, we highly recommend setting up a MyCRA online profile, which you can do here.
Wealthsimple also offers a TFSA contribution tracker, which will allow you to estimate your contribution room with some accuracy, but we still highly recommend setting up a MyCRA profile to verify our estimation! You can follow the instructions on how to set up your TFSA contribution tracker in our FAQ article here!
You can also learn more about TFSAs here!