Now that 2018 is in full swing we thought it would be a good time to connect with households to confirm 2018 Tax Free Savings Account (TFSA) contribution room and contribution rules.
TFSA Contribution Rules
The annual TFSA contribution limit for 2018 has been set at $5,500.00. Any previously unused contribution room can be carried forward to the current year and you can re-contribute any growth previously withdrawn from your TFSA. Note that any amounts withdrawn from a TFSA can only be re-contributed the calendar year after they were withdrawn, at the earliest. The overall maximum TFSA contribution limit is presently $57,500.00 plus any plan growth withdrawn in a previous year and not already re-contributed.
The contribution rules can be confusing depending on how much money you have contributed and withdrawn over the years. If you are unsure of the total amount you can contribute to your TFSA you can obtain your personal contribution room amount by logging on to your Canada Revenue Agency (CRA) Online Account.
CRA Online Account
If you have not already established your CRA Online Account we would encourage you to set-up your access. As outlined on the Government of Canada website: any contributions that are made or withdrawn from a TFSA in the prior year may not be reflected in your available current year contribution room until after the end of February. All [Financial Institutions] have until the last day of February to electronically submit a TFSA record to the CRA for each individual who has a TFSA. Any transactions made in the current year will not be included. Please note that if you accidently over-contribute to your TFSA you will be penalized on any over-contribution amount.
Given the importance of not over-contributing to a TFSA we recommend that clients track their own contributions and withdrawals. At 360 Private Wealth Management, Manulife Securities Incorporated we keep record of all history on any and all plans held with us, however we do not have information on any TFSAs held at other institutions. If you have any questions about your allowable contribution room please call our office before making your contribution.
How to Make Your 2018 Contribution
If you would like to make your TFSA contribution via cheque please ensure your cheque is made payable to: Manulife Securities Incorporated. You can mail or drop off your cheque at our office: 1 – 25 Scurfield Blvd, Winnipeg, MB R3Y 1G4.
For your convenience your TFSA contribution can also be made through online banking. Please visit our Frequently Asked Questions page for assistance in setting up your TFSA to receive electronic payments. If you encounter any issues while setting up your account please contact our office.
You can also arrange to contribute to your TFSA throughout the year (weekly, bi-weekly, monthly, quarterly) through a pre-authorized deposit plan, which can make contributing a bit easier to budget. Contact our office to discuss if a pre-authorized deposit plan might work for you.
If you have any questions regarding your TFSA contribution, or if you would like information on investment or financial life planning in general, please feel free to contact our office.
David J. Luke, CFP, RFP, CLU, CH.F.C., CIM | Financial Advisor
360 Private Wealth Management | Manulife Securities Incorporated
Unit 1 – 25 Scurfield Boulevard, Winnipeg, MB R3Y 1G4
Main Office 204.925.5868 | Direct 204.925.2073| Fax 204.925.2263 | Toll Free 844.688.3656