![]() And the losses are not deductible from gains, as in a non-registered account. (Of course assets that lose value in a TFSA drag you down. That is not a taxable event, so the TFSA did its job in allowing that expansion and ensuring you get to keep 100% of it. ![]() But assets which have been sitting in a TFSA and grown in value can be removed, opening up new contribution room. ![]() Yes, the annual contribution limits are carved in stone – so everybody in 2021, for example, gets to dump six grand into their plan (though most will not). In theory there’s no limit to the amount that can be put into a tax-free account. This is why the TFSA is the gift that just keeps on giving. Hoping you can clear this up in your classic Garth way in a future blog post. I never thought you’d be able to “earn” more room because you did extraordinarily well in the markets. I just assumed any added-back contribution room from withdrawals would be equal to whatever your lifetime contribution amount is, plus any new annual amounts. ![]() Sounds too good to be true, right? But it seems like this might actually be allowed.īeing someone who has worked in the industry for years, I feel like I would have known if this was possible. I then withdraw all of it before the calendar turns over to 2022, and then on Jan 1 I’ve created $100k of contribution room, plus the new annual contribution amount. The idea is that if you hit a grand slam in your TFSA, withdraw the profits, you have then just created new contribution room for yourself over and above the annual contribution limits. And blog dog Nick just had a TFSA epiphany…Ī non-financial world friend of mine said his accountant let him know about a loophole in the rules. Now, there’s also another method of revenge. And maxing your RRSP is one of the best strategies possible since it allows tax to be shifted, and reduced. Given what Chrystia the Impaler is likely to do in her maiden budget next month (or soon thereafter) tax avoidance is a big deal. It’s weird, cultural, dangerous and apparently sexist. It’s why most people are perfectly okay over-paying for a house with 20x leverage using a loan with a 100% chance of resetting at a higher rate, but they have no liquid assets. And here’s all the evidence you need that most people have never (and will never) read this pathetic blog: half the nation has no idea what can go into an RRSP (like exchange-traded funds). RRSP contributions, says a new bank survey, will be far lower this year – meaning a lot of people will pay more tax. The slimy little pathogen has hugely increased personal savings (thanks to Trudeau Covid cash and WFH), but it’s also dashed confidence. (Watch for tax that might be triggered.) Or you can borrow the cash from the bank or CU and use the refund to pay down the loan. Assets already owned can be shifted over and counted as a contribution. Up to $27,230, plus any amount missed in the past. Just a few days remain to contribute to your retirement plan in order to deduct it from the 2020 tax bill.
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