How much do you know about financial independence?

i have a question…when the tfsa started, we put in max 5g a year each for 3 years, until we needed to buy a house, so we withdrew. the following year, we put the 15k each back in, thinking that was ok…i got burned by by govt like $130 each because we contributed over 5k…isn't this allowed?? since then i took the money back out and forgot about my tfsa as it annoyed me a little.

Whatever you withdraw, you can deposit back in to the account … but you can only put the deposits back in the calendar year after the withdrawal. What you described above seems correct - you withdrew $15k, then put $15k back the following year. Your contribution room is recalculated once per year, on January 1, so if you withdrew before Dec. 31 and contributed after Jan 1, you should be okay.

If you got dinged with tax then either you made a mistake with your dates, or perhaps your banking institution reported the dates incorrectly.

For example, if you took $15k out on Dec. 30, but your bank only reported it on Jan 2, then it may not have made it into your contribution room calc on time, so showed up on CRA records as being withdrawn and deposited back in the same year. You'd be nicked for tax (1%/month) on that overcontribution.

is my total limit now whatever the max cummulated limit would be today, minus 15k? like, if i wanted to put as much as i could back in today, how do i figure it out?

Your total limit on Jan 1 will be:

- contribution room remaining from previous year carried over to new year, plus
- total withdrawals made during previous year, plus
- new contribution room for the calendar year (now $5500), less
- contributions made last year.

Your best way to know for sure what CRA thinks you can contribute this year is to go to the "My Account" part of the site. If you haven't registered on the CRA site and you're a Canadian taxpayer, you really should. If you click on the "RRSP and savings plans" tab, you can look up all of your contribution room statements for past years, as well as complete transaction summaries into and out of your TFSA account. If the dates on the transaction summary don't match your records (ie, bank reported dates incorrectly) you can appeal that $130 penalty.

^^ thanks for taking the time to type that…maybe i do have my dates messed up so i'm going to go back and check. i could have sworn i was totally doing it right, then i got the bill, paid it, fumed, and did nothing

and good to know, i have logged into my cra account, although didn't realize there was something about the tfsa in there

edit: ok, duh, so yeah i put it back the same year in december…that part maybe I thought wasn't an issue. turns out i withdrew and put back a couple times that year…lol…good to know that is a no-no

You're not alone. From articles I've read, rules around when you can pay back your withdrawals are the biggest cause of confusion with TFSA accounts.

You're not alone. From articles I've read, rules around when you can pay back your withdrawals are the biggest cause of confusion with TFSA accounts.

It is all part of the CRA's management plan.

Technically, it's your bank's fault for allowing you to do it. I did something similar. Took out $25k to put in a high interest short term GIC in August and when that was done I put it back in my TFSA in October. And of course, I get a notice saying I had an overpayment and had a $400 penalty. However, I managed to appeal and actually got my penalty reversed. If you play dumb, outline your case and blame the bank for continuously allowing you to withdraw and deposit without notice you may have a chance to get your penalty back.

technically, it is your fault, not the banks. i'm with you all the way, blame the bank 100%. screw them in any way possible, they will certainly screw you, but they don't baby sit your accounts in and outs. if you want to put money in and take money out, that's your responsibility. no one will call you at home and say, uh oh mr. smith looks like you made a boo boo. but if you can paint it that way to the CRA, more power to you. you can make many mistakes like carrying a credit card balance, and if you can pin it on the bank for giving you the card in the first place, again, i applaud your grift.

Technically, it's your bank's fault for allowing you to do it. I did something similar.

Technically, no chance in hell it's the bank's fault. There are no rules stating that anyone can have one and only one TFSA account. The bank can only monitor activity in their own system. I can open TFSA accounts with three different banks if I want, and there's no way that any one bank would know what I'm doing with my other accounts, nor do they know what my deposit limits are. That is for the taxpayer to keep track of.

There's no problem transferring (via the banks TFSA transfer form) from say a BMO investment inc TFSA to a Investorline TFSA, right?

Hmmm … good question. I would assume that's okay (otherwise why have a transfer form in the first place?), but don't know for sure.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/trnsfrs/menu-eng.html

There's no problem transferring (via the banks TFSA transfer form) from say a BMO investment inc TFSA to a Investorline TFSA, right?

yes you can do it, but your institution needs to do the transfer so talk to them. otherwise you'll could get taxed depending on the amount transferred and how much of your contribution limit you've already used up.

here:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/trnsfrs/wn-eng.html

lol - missed switch's post.

hmm looks like I'll probably need to pay a penalty this year.
I moved $20k from my TSFA into a short term, high interest account then back into the TFSA after the term was over - of course, I asked my banker if I was within my limit for the year before doing so as I didn't want to be penalized and she double checked and assured me I wouldn't have any problems.

Looks like I'll have to appeal and hope to get out of that major fuck up. Looks like I'm going to start looking for a new banker, mistake like that seems pretty bush-league if you ask me. (although yes, I should have done the double-checking myself).

So, you're suggesting that the bank keeps track of all the different contribution limits for each of their hundreds of thousands of accont holders?

Any financial transaction over $10k gets reported to FINTRAC. So they are watching out for you… Ha

High mutual fund fees could delay retirement plans, CCPA says

It is not in most people’s power to reduce mutual fund fees

Not true. You just have to try.