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What is the maximum contribution?
You can contribute up to $5,500 ($5,000 for the year 2009 to 2012) per year in your TFSA, regardless of your income. Contributions in excess of your TFSA contribution room will be subject to a tax equal to 1% per month. The maximum amount will be indexed annually based on the Consumer Price Index (CPI), and rounded up to the nearest $500.
Can my unused contribution room be carried forward to the following year?
Any unused contribution room will be carried forward indefinitely to the following years.
For example, if you contribute:
$3,000 to a TFSA in 2009, your contribution room for 2010 will amount to $7,000 ($5,000 for 2010 and $2,000 carried forward from 2009).
Can the amount withdrawn from the TFSA be re-contributed?
When proceeding to a withdrawal from your TFSA account, the amount withdrawn can be added to the contribution room in the following calendar year.
For example, if you have withdrawn $2,500 from your TFSA in 2012, this amount will be added to your contribution room for the year 2013. Your new total contribution room will be $8,000 ($5,500 + $2,500).
Is it possible to borrow funds to contribute to a TFSA?
Yes, it is possible to borrow funds to contribute to a TFSA. However, the interest paid on the loan for the amounts invested in the TFSA is not tax-deductible.
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