Tax Free Savings Account


In 2008, the Federal Government introduced a registered savings account that allows taxpayers to earn investment income tax-free. The Tax-Free Savings Account (TFSA) is available to Canadian REsidents age 18 and older, TFSA allows taxpayers to set money aside in eligable investment vehicles and watch those savings grow tax-free throughout their lifetime.

There are no restrictions on the way TFSA funds (contributions and earnings) may be used (ie. purchase a car, renovate a home, start a small business, take a family vacation, or just save for a rainy day). All income levels and all walks of life can benefit from a TFSA. But only a careful review of each person's financial situation will determine how to optimize use of RRSP's, RESP's RRIF's and TFSA's. 

TFSA Contribution Limit

Contributions to a TFSA may only be made by the Holder and contribution room is not tied to income. The TFSA annual room limit will be indexed to inflation and rounded to the nearest $500. Therefore, it may be different every year.

  • The maximum TFSA contribution limit for 2021 remains at $6,000
  • Your individual contribution room is made up of your TFSA dollar limit, any unused contibution room from previous years, and any withdrawals made from your TFSAs the previous year.

TFSA Unused Contribution Room

When a TFSA Holder contributes less than the maximum contribution limit, the difference is referred to as unused contribution room.

  • Unused contibution room will accumulate each year.
  • Unused contribution room is carried forward indefinitely, allowing the Holder to catch up by contribution more than the maximum contribution limit for the future year.
  • A TFSA withdrawal will increase the contribution room for the year after withdrawal. As a result, when amounts are withdrawn from a TFSA they can be re-contributed in the future when funds become available. 
  • Canada Revenue Agency can confirm your contribution room. The CRA recommends TFSA holders take avantage of their online service option MyAccount to obtain the most up-to-date information about their TFSA transaciton sand available contribution room. ANy changes to the holder's TFSA's are uploaded daily as the TFSA information from TFSA issuers is received and processed. Or you may call 1-800-257-6999 the Tax Information Phone Service