The deadline for contributing to a TFSA may be December 31, but in point of fact, there’s technically no TFSA deadline as unused contributions are carried forward to the next year. That said, as the saying goes “time is money” and there’s really no better time like the present to open a TFSA as you’ll benefit from the power of compound interest.
The contribution limit for a TFSA beginning in 2024 is $7,000. If you don’t come up with the entire amount by New Year’s Eve, unused contributions are simply carried forward to future years and becomes what’s known as TFSA “room.”
If you’re a Canadian resident, have never contributed to a TFSA and were at least 18 in 2009, the year TFSAs were introduced, you’d have $95,000 in unused TFSA room at the end of 2024 (lucky you!). If you’re unsure of how much room your TFSA has, you might check need to check your TFSA contribution limit with the CRA or use an investment platform that offers a free TFSA tracker so that you can keep tabs on your lifetime contributions.
If you’ve yet to become a TFSA superfan, you may want to read up on some of their extraordinary attributes, like tax-free investment growth and super flexible withdrawals and deposits, or if have questions about whether it’s better to contribute to a TFSA or RRSP, we’ve got your answer right here.
The only way you can go wrong with a TFSA is if you over contribute; the CRA will assess a 1% monthly tax on any amount over the contribution limit. If you have, don’t freak out; easy-to-follow remedies can be found here.
At Wealthsimple our TFSA’s come with state of the art technology, low fees and the kind of personalized, friendly service you might have not thought imaginable from an automated investing service. You can learn more about our TFSAs here or get started with a Wealthsimple TFSA.
