Examples – TFSA contribution room

Example 1

Brayden was eager to open his TFSA, but he didn’t turn 18 until December 21, 2017. On January 4, 2018, he opened a TFSA and contributed $11,000 ($5,500 for 2017 plus $5,500 for 2018 – the maximum TFSA dollar limits for those years). On the advice of his broker, he had opened a self-directed TFSA and invested in stocks that increased in value. By the end of 2018, the value in Brayden’s TFSA had increased to $11,800. Brayden was worried that for 2019, he would only be able to contribute $5,200 (the TFSA dollar limit of $6,000 for 2019 less the $800 increase in value in his TFSA through 2018). Neither the earnings generated in the account nor the increase in its value will reduce the TFSA contribution room in the following year, so Brayden can contribute up to another $6,000 in 2019 to his TFSA.

Example 2

From 2012 until the end of 2017, Josh contributed the maximum TFSA dollar limit each year. He did not make any other contributions or withdraw any funds. As a result of his $5,500 contribution in 2017, his unused TFSA contribution room at the end of 2017 was zero.

His TFSA contribution room at the beginning of 2018 was $5,500 (the 2018 TFSA dollar limit).

On June 15, 2018, Josh made a contribution of $500. On October 26, 2018, he withdrew $4,000.

His unused TFSA contribution room at the end of 2018 was $5,000 ($5,500 - $500).

Josh calculated his TFSA contribution room at the beginning of 2019 as follows:

Step 1: Calculate Unused TFSA contribution room at the end of 2018

TFSA contribution room at the beginning of 2018 ($5,500) minus contributions made in 2018 ($500) = Unused TFSA contribution room at the end of 2018 ($5,000)

Step 2: Calculate TFSA contribution room at the beginning of 2019

Unused TFSA contribution room at the end of 2018 ($5,000) + total withdrawal made in 2018 ($4,000) + 2019 TFSA dollar limit ($6,000) = TFSA contribution room at the beginning of 2019 ($15,000).

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: