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TFSA withdrawal and re-contribution confusion
March 20, 2016
2:56 pm
littlepie
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March 20, 2016
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First of all, I would like to express my sincerest gratitude to all the participants on this website/forum. Y'all have been incredibly helpful in guiding my poor financial sense and where to put my first chunk of savings.

I have a pretty basic question regarding TFSA - as this is my first time having saved a significant amount in TFSA.
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I've saved up $27,000 in my TFSA account (from the beginning of time to March 2016), all of which I withdrew recently.

Now, my 2016 contribution room is $25,000. And so far this year, I've contributed $6000, leaving a $19,000 contribution limit for 2016.

Question 1: I understand that I can't recontribute the $27,000 that has been withdrawn, but can I still contribute the remaining limit of $19,000? Will this be over-contribution?
Question 2: If I contributed the $25,000 maximum in 2016, can I then withdraw all of it in December? Will that increase my 2017 contribution room?

Thanks so much in advance!

March 20, 2016
6:09 pm
Bill
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If your contribution room as of January 1 2016 was $25K then, yes, you still have $19K you can put in this year.
And, yes, any amounts withdrawn in a year get added to your contribution room for next year.

March 20, 2016
8:22 pm
kanaka
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Bill said

If your contribution room as of January 1 2016 was $25K then, yes, you still have $19K you can put in this year.
And, yes, any amounts withdrawn in a year get added to your contribution room for next year.

I would look at "my account" tomorrow on the CRA site and make sure personal records match what the account says. And go from there. Keep in mind that my account records would not be up to date January 1 2016.

March 20, 2016
8:53 pm
kanaka
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littlepie said

First of all, I would like to express my sincerest gratitude to all the participants on this website/forum. Y'all have been incredibly helpful in guiding my poor financial sense and where to put my first chunk of savings.

I have a pretty basic question regarding TFSA - as this is my first time having saved a significant amount in TFSA.
----------------------------------------------------------------------------------------------------------
I've saved up $27,000 in my TFSA account (from the beginning of time to March 2016), all of which I withdrew recently.

Now, my 2016 contribution room is $25,000. And so far this year, I've contributed $6000, leaving a $19,000 contribution limit for 2016.

Question 1: I understand that I can't recontribute the $27,000 that has been withdrawn, but can I still contribute the remaining limit of $19,000? Will this be over-contribution?
Question 2: If I contributed the $25,000 maximum in 2016, can I then withdraw all of it in December? Will that increase my 2017 contribution room?

Thanks so much in advance!

What month and year did you withdraw the $27,000?

March 21, 2016
7:03 am
Rick
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kanaka said
I would look at "my account" tomorrow on the CRA site and make sure personal records match what the account says. And go from there. Keep in mind that my account records would not be up to date January 1 2016.

CRA site won't show any transactions for this year, they always seem to be a year behind. Mine shows I still have 51K in contribution room even though I have none. Only thing it is good for is finding out how much room you had at Dec 31, 2015 plus 2016 contribution room. If he withdrew/contributed in 2016, it's up to him to keep track as the banks don't report transactions until Jan of the following year, my banks anyway.

littlepie said
Question 2: If I contributed the $25,000 maximum in 2016, can I then withdraw all of it in December? Will that increase my 2017 contribution room?

I withdrew the interest PT paid me on Dec 31 and it showed up in my contribution room for 2016.

March 21, 2016
8:31 am
Bill
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Rick, Bill did not say that, kanaka did. Bill says don't look at MyAccount unless you only want to see activity up to Dec 31 2014. Institutions have until Feb 29 2016 to report your 2015 TFSA activity so it should be there too but you never know with government. It will certainly not show any 2016 activity.

March 21, 2016
9:18 am
Rick
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Bill said

Rick, Bill did not say that, kanaka did. Bill says don't look at MyAccount unless you only want to see activity up to Dec 31 2014. Institutions have until Feb 29 2016 to report your 2015 TFSA activity so it should be there too but you never know with government. It will certainly not show any 2016 activity.

Sorry Bill....fixed it.
Banks may have until Feb 29, but all mine have been updating in early January. My point as well was don't rely on what CRA website says about contribution room for the current year.

March 21, 2016
10:56 am
kanaka
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Litlepies info is a little vaque.

LP says:
I've saved up $27,000 in my TFSA account (from the beginning of time to March 2016), all of which I withdrew recently.

I ask:
What was the date of withdrawal. All taken out of the TFSA and placed into a non registered account or cash to LP.

LP says:
Now, my 2016 contribution room is $25,000. And so far this year, I've contributed $6000, leaving a $19,000 contribution limit for 2016.

I ask:
Is your $25,000 contribution based on your records or CRA? And what is the status of the other $2,000?

LP says:
Question 1: I understand that I can't recontribute the $27,000 that has been withdrawn, but can I still contribute the remaining limit of $19,000? Will this be over-contribution?

I say:
$19,000 possibly yes and if you have your records I would check and verify "my account" as it should FULLY reflect all of your TFSA transaction up and till the end of 2105. If my account does not match your records you have some work to do. You may have to get the FI to resubmit your withdrawal and in that case it WILL update on my account.

LP says:
Question 2: If I contributed the $25,000 maximum in 2016, can I then withdraw all of it in December? Will that increase my 2017 contribution room?

I say:
Yes and yes. But only if.........

March 21, 2016
11:13 pm
Loonie
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I just read this thread for the first time.

I think the responses are all trying to get at the same thing, namely...
what is the basis for your understanding of how much contribution room you currently have.

In my opinion, Bill's initial answer is correct, but it assumes you have kept good track of your contributions and that your calculations are based on that; also that you were at least 18 in 2009. Everyone else is trying to make sure you have done that, so that they don't give you bad advice.

Let us know if the answers are not clear, but you will need to tell us how much you actually contributed over the years.

There is some good information here: http://www.taxtips.ca/tfsa/con.....utions.htm

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