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Dale Jackson

Your Personal Investor

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First the good news: the tax-free savings account contribution limit for 2017 has been set at $5,500. That means Canadians over 18 years old can invest that amount in just about anything and the gains will never be taxed.

Now the bad news: trying to figure out where you stand personally on total contribution limits can be like trying to dismantle a bomb. Cumulative contribution limits have been growing since the TFSA program was introduced eight years ago, but with money coming in and going out - and some Canadians with several accounts - keeping a total tally can be hard. An over-contribution could result in a hefty penalty from the Canada Revenue Agency.

Here’s a breakdown of the annual contribution limits from the beginning:

 

Annual Contribution limits

Years TFSA Annual Limit Cumulative Total
 2009 - 2012 $5,000  $20,000 
 2013 - 2014 $5,500  $31,000 
2015 $10,000  $41,000 
2016  $5,500  $46,500 
2017  $5,500  $52,000 

If you have never contributed to a TFSA, your total contribution limit is $52,000 as of 2017.

If you have made withdrawals over the years, the contribution space is returned to you in the next calendar year.

If you’re not sure where you stand, the CRA keeps a running tally – but only for the preceding calendar year.  

If you’re still not sure, play it safe by waiting until January to contribute – and don’t contribute more than the new limit of $5,500. By March 1st the CRA should have tallied your total available space as of December 31, 2016.