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Tax Free Saving Account (TFSA) Limits for 2012

| January 1, 2012

On December 6, 2011, the Canada Revenue Agency (CRA) announced the TFSA dollar limit of $5,000 contribution room for the year 2012. The limit is indexed to inflation and rounded to the nearest $500 in later years. For 2012, the application of the indexation increase of 2.8%, which is rounded to the nearest $500.

Features of TFSA:

  • TFSA started in 2009 for Canadian residents over 18 years of age to earn tax free investment income during their lifetime.
  • Contributions to a TFSA are not deductible for income tax purposes.
  • Interest on money borrowed to invest in TFSA is not tax deductible.
  • Income generated from the TFSA is tax-free.
  • Any unused TFSA contribution room can be carried forward to later years.
  • Total of withdrawal during a calendar year is added to the contribution room for the next calendar year.

To find out your current contribution room, you can either call CRA at 1-800-959-8281 or check My Account for Individuals with CRA.