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Tax-Free Savings Account
Invest today and never pay tax.
Contribute as much as $5,500 every year
The annual contribution limit has changed a few times since TFSAs were launched in 2009. This year’s limit is $5,500. And thanks to the lifetime carry-forward room, new TFSA investors may be able to contribute as much as $57,500 in 2018.
Best of all: any growth in the value of TFSA investments is tax-free. You won’t be taxed while your savings grow and you won’t be taxed when you withdraw.
TFSA carry-forward rule
Every year, you can contribute up to the TFSA dollar limit for the year PLUS any previous unused contribution room AND the amount you withdrew last year. It’s a long sentence, but a simple rule. Here’s an example:
Let’s say you’ve maximized your TFSA contributions every year and last year you withdrew $2,000 to help pay for a vacation. This year, you can contribute $5,500 PLUS the $2,000 you withdrew last year, for a total of $7,500.