TFSA Contributions for 2021 Announced

Once again, your Tax-Free Savings Account (TFSA) contribution room will increase by $6,000 as soon as the year 2021 rolls around. You could have much more TFSA contribution room, though.

The TFSA is designed to help you save serious money. Every dollar of TFSA contribution is after-tax money. So, the amount you put in and what you earn inside TFSAs are yours to keep.

Because TFSAs allow you to earn income and growth tax free, it makes good sense to contribute the maximum allowed amount to your TFSA every year and maximize returns.

What’s your TFSA contribution room for 2021?

TFSAs began in 2009. Anyone 18 years and older and has a social insurance number is eligible. If you’ve never contributed to a TFSA, you’ll have accumulated $75,500 of TFSA contribution room for 2021 if you have been eligible since 2009. If you just became eligible in 2020, then you’d have room of $12,000.

                                      Year                          TFSA Contribution Limit for each year

2009-2012                             $5,000

2013-2014                             $5,500

2015                                      $10,000

2016-2018                             $5,500

2019-2021                             $6,000

                                   Total    $75,500

Remember that any unused room will accumulate. Also, any TFSA withdrawals will add to your TFSA room as soon as the next calendar year. For example, if you max out your TFSA and you withdraw $1,000 now to buy Christmas gifts, you can contribute $7,000 in 2021.

This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.

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