Canadians - TFSA help please

[changedname]

I get so confused with the TFSA limits. Here is where I am:

2009 - put in 5000
2010- put in 5000
2011 - put in 5000
Jan 2012- put in 5000
April 2012 - took out 15000 (new house)

So how much can I put in this year? 15000 + the new 5500 limit for 2013, so 20,500? Is this right? Is that how it works?

[Deleted]

Yes, that's how it works.

[Deleted]

Oh, and the 20,000 will carry forward. So if you 'only' manage $10,000 this year you'll have 15,000 for next year.

[Deleted]

You can't replace money as I understand it. If you put in $5000, take it out, and put it back... that counts as $10,000.

In other words, ask your bank or risk taxes.

[Deleted]

Sorry, this is more clear: www.tfsa.gc.ca/

[Deleted]

Jan 2, 2013 15:47:31 GMT -5 @tokenhoser said:

You can't replace money as I understand it. If you put in $5000, take it out, and put it back... that counts as $10,000.

In other words, ask your bank or risk taxes.

Yes, this. It's not tax-free when you put a withdrawal back in.

[Deleted]

You are correct.

Full amount of withdrawals can be put back into the TFSA in future years. (ie, not in the same year)

So if you put in $5K, it grew, and you withdrew $6K, you can re-deposit $6K the following year.

[Deleted]

Jan 2, 2013 15:57:16 GMT -5 @lauriergirl28 said:

Jan 2, 2013 15:47:31 GMT -5 @tokenhoser said:

You can't replace money as I understand it. If you put in $5000, take it out, and put it back... that counts as $10,000.

In other words, ask your bank or risk taxes.

Yes, this. It's not tax-free when you put a withdrawal back in.

This is incorrect. Its clear in the link Token provided.

[changedname]

Thanks guys! Yes, I purposely waiting til 2013 to put anything back in and now have $10K ready to go. I feel like my brain makes this more complicated than it is.

[hannamaren]

Jumping on this post with a related type q.

Right now, we have about $50k in savings (regular acct and TFSA)
We plan to buy a house with about a $70k downpayment. Would you put the savings money into an RRsp now for the tax break (we normally get a 40% refund of the money we put in) and then take it out (first time homebuyer) for the downpayment?

[rugbywife]

CRAP. I had NO idea that it is 5k per year...sure wish I had put our 10k in savings into TFSAs last week rather than later this week. Sigh, dumb move.

[hannamaren]

Vicmo, I guess I better decide fast.

[hannamaren]

But, no, I could just withdraw some of the other money already in there.
And we are far from maxed out.

[Deleted]

Jan 2, 2013 20:31:08 GMT -5 hannamaren said:

Vicmo, I guess I better decide fast.

I would do it. Assuming you could pay it back over the scheduled period, I don't see a down side.

[rugbywife]

Jan 2, 2013 20:30:36 GMT -5 @vicmo said:

Jan 2, 2013 20:16:51 GMT -5 rugbywife said:

CRAP. I had NO idea that it is 5k per year...sure wish I had put our 10k in savings into TFSAs last week rather than later this week. Sigh, dumb move.

It's 5k per year for 2009-2012, and 5.5K per year for 2013 (and theoretically, onwards). So, assuming you were >18 in 2009, you have 25.5k of contribution room as of yesterday.

Yes, I went to the Rev Canada website and figured that out after posting it here...but good to know I read it right. That is awesome...of course that would require DH and I to actually HAVE 25500 each but we will start with what we have and work from there, tax free savings is tax free savings!

[rugbywife]

Jan 2, 2013 20:55:38 GMT -5 @vicmo said:

Jan 2, 2013 20:51:57 GMT -5 rugbywife said:

Yes, I went to the Rev Canada website and figured that out after posting it here...but good to know I read it right. That is awesome...of course that would require DH and I to actually HAVE 25500 each but we will start with what we have and work from there, tax free savings is tax free savings!

We just opened my H's first TFSA last fall - it's all about making progress!

Yep! In 2012 we managed to move and do a small reno and save a little bit. I have never been a saver (other than enough for two down payments and a wedding), so the fact that we even have what we do is impressive to me. Now I just have to talk myself out of another reno (addition) so we can keep the savings!

So please explain this to me: once I put the money into a TFSA account, if I take it out I can't put it back in again?

[rugbywife]

Got it. So right now we have 51k between the two of us, so we can put in and take out this year as needed since we won't max out the 51k (unless we win the lottery!)

[Deleted]

Jan 2, 2013 16:01:20 GMT -5 @gingersb said:

Jan 2, 2013 15:57:16 GMT -5 @lauriergirl28 said:

Yes, this. It's not tax-free when you put a withdrawal back in.

This is incorrect. Its clear in the link Token provided.

I see that! Thanks