TFSA Limit Set to Change in 2016
According to a recent Globe & Mail article the Liberal Party is planning to reduce the annual TFSA (TAX FREE SAVINGS ACCOUNT) contribution limit back to $5,500 starting in 2016.
This was part of their election platform.
You may recall the Conservatives increased the TFSA Annual contribution limit in 2015 to a maximum of $10,000 per person.
I will expect there will be no other changes but then we will have to wait and see.
The total cumulative TFSA limit PER PERSON is
> $5,000 per year X 4 (2009 to 2012) = $20,000
> $5,500 per year X 3 (2013 to 2015) = $16,500
> Special increase in 2015 of an additional = $4,500
GRAND TOTAL at end of 2015 = $41,000 PER PERSON.
For a couple this is a 2015 combined maximum of $82,000.
ADD $5,500 more PER PERSON or $11,000 PER COUPLE each calendar year.
The Original TFSA contribution room was expected to grow by inflation but only in cumulative $500 increments based on how many years of inflation it took to reach $500. Initially it took four years which is why the first increase was in 2013. We'll have to wait and see what the Liberals decide.
You may recall income earned in a TFSA accumulates Tax Free.
Also, any withdrawals from a TFSA can be replenished in the following year or later if you have access to funds in the future. You never lose TFSA contribution room.
This note was meant to give you the latest information and to help your financial planning in the new year.
IF there are any changes on the above once we hear the official word THEN I'll let you know.
Just wanted to give you a heads up.
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