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2019 annual TFSA limit set at $6,000.00
December 2, 2018
11:24 pm
Vatox
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when the demographic transition is in full swing, nothing will be held sacred.

December 2, 2018
11:55 pm
Vatox
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December 3, 2018
1:08 am
Loonie
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If certain changes are perceived as so unpopular that a ruling party (any of them) could lose an election over it, then it probably wouldn't happen, but something else would be instituted elsewhere in the budget to compensate, so that we can focus our complaints on that instead. But they will be hoping we don't notice or don't care too much.

Freezing contribution limits "temporarily" or skipping a year or two of contributions would cause some grumbling but would not likely lose them an election. Fairly simple things like that are much more likely than messing with the OAS. it would be easier to fiddle with the income threshold.

I am surprised at how many people I know who don't use them, even though they could benefit. Often it's because they've never really understood them. This is especially true of people in their 80s and 90s.
It would be far simpler to just give them a better tax break on investment gains; they can understand that.
In my view TFSAs were ill-conceived and appear to have been hatched on a paper napkin, especially the silliness about not being able to reinvest what you took out until the following calendar year - a rule that seems designed to catch people unawares.

December 3, 2018
5:31 am
Saver-Mom
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Agreed, Loonie
For that, the whole tax system is ill-conceived and needlessly complicated. What a waste of so many neuron-hours that could be put to better use.

December 3, 2018
5:46 am
Top It Up
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The TFSA is a registered account that comes with a yearly deposit cap requiring tracking and reporting by FIs to the CRA. The FIs reporting of account activity is a yearly function NOT a daily function.

The silliness would come from the registrants treating the TFSA like a regular bank account - withdraw $20 today, deposit $15 tomorrow and so on and so on.

December 3, 2018
4:56 pm
Bill
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Complicated? Aside from the (cumulative) annual limits for new contributions, the one thing you need to know is that any amounts you take out can't be put back into a TFSA until a following year.

December 3, 2018
5:20 pm
Retep
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Tax Free Savings Account name contest.

What should it be called?

Tax Free Savings Investment?

Annual Tax Free Savings Investment?

The key is if you withdraw you cannot re-invest till next year but only assuming you have fully depleted your accumulated eligibile amount.

It is a worth while effort to turn on ALERTS on your Credit Cards and Bank/Credit Union Accounts.

December 9, 2018
12:55 pm
Retep
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ValueTime said
Let's suppose I have made the maximum contributions every year and therefore I have no "room" to put any more funds in until next year 2019.
Since the TFSA was started in 2009 I have found it necessary to move from one provider to another several times because of better rates or because the provider was bought out (ING, ALLY).
It is the responsibility of the providers to inform CRA of all fund transfers BUT my experience is this has sometimes been "missed" by the provider or CRA or perhaps both.
Looking online at my transaction records as stored by CRA I find it shows me having over $30,000 of "room" in my TFSA as of Jan 2018.
What would you do?  

If your records are impeccably correct, do what you are allowed to do. And if your records are good then compare to CRA records once they are updated some time after end of February 2019. Each deposit should be listed by amount and FI. If you have an offending FI ask them to resubmit your contribution. I had same problem and Outlook finally did resubmit my TFSA deposits. All is good now.

It is a worth while effort to turn on ALERTS on your Credit Cards and Bank/Credit Union Accounts.

December 9, 2018
1:58 pm
Rick
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Retep said

If your records are impeccably correct, do what you are allowed to do. And if your records are good then compare to CRA records once they are updated some time after end of February 2019. Each deposit should be listed by amount and FI. If you have an offending FI ask them to resubmit your contribution. I had same problem and Outlook finally did resubmit my TFSA deposits. All is good now.  

Trouble with the CRA web site is they are a year behind. FI's report 2018 transactions in 2019 so what you see now is room available for 2018 as of Dec 31, 2017. From their web site:

TFSA - Important information

Your financial institution sent the CRA information about TFSA transactions you made on or before December 31, 2017.
You should compare the TFSA transaction information we have with your own records to ensure that the information we have on record is correct.
Your previous year’s transactions may not have been received or processed by CRA and therefore would not yet be reflected in the amount.
Your TFSA contribution room could change if we process additional information.
Your transactions that were made in 2018 are not included.

Can't remember for sure, but don't banks have until the end of Feb to file previous years transactions?

I always use my own records for contribution calculations.

December 9, 2018
2:13 pm
Norman1
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Rick said


Can't remember for sure, but don't banks have until the end of Feb to file previous years transactions?

I always use my own records for contribution calculations.

That's correct. They have until end of February, according to Chapter 4 of RC4477: Tax-Free Savings Account (TFSA) Guide for Issuers:

Due date

You [the TFSA issuer] have to file the TFSA annual information return by the last day of February following the calendar year to which the TFSA annual information return applies. If the last day of February is a Saturday or Sunday your TFSA annual information return is due the next business day.

If you discontinue your business or activity, you have to file a return for the year or part-year no later than 30 days after the date the business or activity ended.

December 9, 2018
3:07 pm
ValueTime
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I have made full contributions since 2009 for a total of $57,500 to end 2018.
CRA records/transaction show all except Jan 2018 so it is $5,500 behind and will probably catch up Feb 2019.

BUT - In 2013 I withdrew or moved $26,500 from on FI to another. The withdrawal from the first FI shows up in CRA transaction but the deposit back in does not.

So CRA indicates I have $26,500 of room in my TFSA. Maybe I should contact CRA and try and argue they screwed up in my favour but I suspect my example is probably the tip of an iceberg which could be growing exponentially as time marches on.

For the time being I will sit and wait.

December 9, 2018
3:48 pm
Top It Up
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This link clearly indicates there is an onus on you to keep exact records of the activity in your account along with penalty information for overcontributions -

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/contributions.html

December 9, 2018
3:59 pm
ValueTime
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I fully agree and I won't be "gambling" the CRA would not find and catch up. Having said this I doubt very few people keep accurate records.
And I wonder how many years back would the CRA have authority to audit.

December 9, 2018
4:06 pm
Top It Up
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Because it is a registered account I would read that as ... forever.

December 9, 2018
4:46 pm
Loonie
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Top It Up said
Because it is a registered account I would read that as ... forever.  

Me too.
There's always your "final tax return" - the one your executor has to file - to catch al the missing bits. It may be a headache for executors if you don't have good records.

I agree though that a lot of people could easily get caught on this because they don't keep records, have lost them, or didn't know they should. There's a lot of years between 18 and 95. This is one of the reasons why I consider TFSAs unnecessarily complicated and likely to trip people up - and, thus, not well thought out (#23 above).

You have to keep not only your own records of what you did so that you know what you can do going forward, but also records of transactions from the FIs so that you can prove it, especially as regards transfers. It would be nice if the FIs printed on their forms in large bold coloured letters, "KEEP THIS DOCUMENT PERMANENTLY TO AVOID PROBLEMS WITH CRA" or words to that effect. It's simple enough for those of us who understood it from the beginning and who are organized and don't move too often or have major upheavals in our lives or become mentally incompetent, but harder for others.
It's ridiculous that we can't depend on accuracy from CRA. Auditor-General should look into it. If they were accurate, we would be able to check that they were accurate and then rely on them in future to recall what we'd done in the past - or at least save their records periodically.

December 9, 2018
5:58 pm
Norman1
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ValueTime said
I have made full contributions since 2009 for a total of $57,500 to end 2018.
CRA records/transaction show all except Jan 2018 so it is $5,500 behind and will probably catch up Feb 2019.

BUT - In 2013 I withdrew or moved $26,500 from on FI to another. The withdrawal from the first FI shows up in CRA transaction but the deposit back in does not.

So CRA indicates I have $26,500 of room in my TFSA. Maybe I should contact CRA and try and argue they screwed up in my favour but I suspect my example is probably the tip of an iceberg which could be growing exponentially as time marches on.

It may or may not be CRA's screwup, depending on how that 2013 transfer of $26,500 was done.

Was it (1) a direct transfer or (2) an indirect transfer ($26,500 was withdrawn from one TFSA and then a $26,500 contribution was made to the other TFSA)?

If it was a direct transfer, then it is possible the relinquishing TFSA issuer incorrectly reported it to CRA as a $26,500 withdrawal. That would incorrectly increase your TFSA contribution room by $26,500. The receiving TFSA issuer wouldn't report a corresponding contribution because the direct transfer in is not a TFSA contribution.

December 9, 2018
7:36 pm
Loonie
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Norman, a significant number of people are reporting these discrepancies in their CRA records.
Do you have any reason to believe that there is a widespread issue of "incorrectness" among FIs in terms of their reporting systems?
Is there any penalty for institutional incorrectness?
How would the consumer ascertain where the problem was?

December 9, 2018
9:34 pm
Vatox
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Lol, read this..

IMG_6055.PNG

December 9, 2018
9:36 pm
Vatox
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This too..

IMG_6056.PNG

December 9, 2018
9:37 pm
Norman1
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I don't know how often TFSA reporting by the financial institutions is wrong, Loonie.

I do believe lots of people are not aware (and don't account for the fact) that the financial institution has until next February to transmit the TFSA information to CRA. CRA probably needs some time to process the received information and update their records.

My interpretation of Appendix A – Data elements – TFSA individual electronic record is that only

  1. Withdrawals
  2. Contributions
  3. Marriage breakdown transfers out
  4. Marriage breakdown transfers in
  5. Acquisition of non-qualified investments
  6. Withdrawal of non-qualified investments

are reported to CRA. There doesn't seem to any reporting of ordinary transfers in and transfers out.

That non-reporting of direct transfers is confirmed by CRA's answer to Question #C2 in TFSA Return FAQ:

2. If an individual client wishes to transfer funds from a TFSA at one institution to a TFSA at another institution, how is this reported?

Direct transfers between individual's TFSAs do not get reported - either as contributions or withdrawals.

Consequently, if one does finds either side of a direct transfer reported to CRA, then a financial institution screwed up.

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