Review: TFSA Understanding

August 1, 2025

How much can you contribute?

  1. Canadian residents aged 18 and over may contribute $7,000.00 per year to a TFSA.
  2. Contributions to TFSAs are not deductible for income tax purposes, but investment income grows tax-free. Additionally, income and capital gains withdrawals are not subject to taxation.
  3. Unused TFSA contribution room may be carried forward to future years.
  4. Excess contributions are subject to a 1% tax every month.

How much can you withdraw?

  1. You can withdraw funds from the TFSA at any time for any purpose.
  2. When you withdraw funds from your TFSA, you can deposit them again without ever reducing your contribution room. However, these funds cannot be deposited back within the same calendar year unless you have not exceeded your contribution room.
  3. Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits.
  4. Upon death, assets held in a TFSA may be transferred to the spouse and remain exempt.

 

Publisher's Copyright & Legal Use Disclaimer

All articles are a legal copyright of Adviceon®Media.

The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. This website is not deemed to be used as a solicitation in a jurisdiction where this representative is not registered. This content is not intended to provide specific personalized advice, including, without limitation, investment, insurance, financial, legal, accounting or tax advice; and any reference to facts and data provided are from various sources believed to be reliable, but we cannot guarantee they are complete or accurate; and it is intended primarily for Canadian residents only, and the information contained herein is subject to change without notice. References in this Web site to third party goods or services should not be regarded as an endorsement, offer or solicitation of these or any goods or services. Always consult an appropriate professional regarding your particular circumstances before making any financial decision.

Mutual Funds and/or Segregated Funds Disclaimer

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investment funds, including segregated fund investments. Please read the fund summary information folder prospectus before investing. Mutual Funds and/or Segregated Funds may not be guaranteed, their market value changes daily and past performance is not indicative of future results. The publisher does not guarantee the accuracy and will not be held liable in any way for any error, or omission, or any financial decision. Talk to your advisor before making any financial decision. A description of the key features of the applicable individual variable annuity contract or segregated fund is contained in the Information Folder. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value. Product features are subject to change.