Peter Wiesner CPA, CA
The Government of Canada in the last few years has taken away many planning tools to taxpayers.
RRSP's and TFSA's remain some of the easiest tools to use in order to reduce or delay income taxes.
Thus, take advantage of all items available to you.
The TFSA is a real good place to start.
TFSA Limits -Per Year
Here are the TFSA contribution limits per year:
If you have never contributed to your TFSA and turned 18 in 2009 or before, have been a continuous resident of Canada
you are allowed to contribute up to $69,500 in 2020.
The Canadian Revenue Agency has some strict penalties and enforcement on over contributions to your tax-free savings account.
Anything in excess of the allowed tax-free contribution room is subject to a 1% penalty charged on a monthly basis on the highest excess tax-free savings amount.
Therefore, if over contributed from September to December (4 months) by $5,000 for the year, 1% of $5000 would be charged for each month, which equates to $200 in extra taxes.
The CRA has your room on their web site, but it's not always accurate or with live information (especially early in the year?). So it's a guide and should be checked before topping up your TFSA.