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TFSA and RRSP

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6:33 pm
January 31, 2011


Maggie

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Here's one for you…..
If I have $3000.00 in my TFSA (contributed in 2010), can I withdraw $2000.00 from my TFSA and then turn around and purchase an RRSP with that money and get a tax break on my 2010 tax return? Wouldn't it be the same as taking money from a savings account and buying an RRSP?

6:44 pm
January 31, 2011


Andrew

Guest

Yes, it does not matter how you fund your RRSP, as long as you are within your contribution limit, you will be able to claim the deduction. But remember that once you pull the TFSA amount out, you won't be able to recontribute that $3000 into a TFSA until January 1, 2012.

6:47 pm
January 31, 2011


msl

Guest

strange. in this scenario, why do you have to do that? the tax break for the tax return seems the attraction? im trying to say that is a pretty nifty move but in the end it will just cost you more interest lost. besides, you will even then reduce your contribution limit by $3000 all for because of the RRSP tax break? i prefer to just to stick it up to the TFSA. interest is tax free anyway, wherein the RRSP will be taxed when you withdraw later. oh well, the final decision is yours so yeah, go ahead with your move, but i dont see the need to do that maneuver. the money is best stocked in the TFSA. good day

11:44 am
February 1, 2011


Maggie

Guest

Thanks for the suggestions/advise Andrew and msl!!

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