How much money can you take out of your TFSA each year?
You can withdraw any amount from your TFSA. Some withdrawal restrictions and limitations may apply to certain investments. For example, depending on your investments, you may not be permitted to make withdrawals until the end of a specific term. Connect with an advisor for more detailed information.
Can you take money out of a TFSA whenever you want?
In most cases, you can withdraw from your TFSA whenever you want, for any purpose. For example, if you have cash in your TFSA, you can withdraw it at any time.
But in some cases, there may be withdrawal restrictions or penalties applied to certain investments you hold. Connect with an advisor to learn more.
Can you re-contribute your TFSA withdrawals?
Yes, you can re-contribute your TFSA withdrawals. Any amounts you withdraw will get added back to your contribution room in the following year.
You can also contribute during the current year if you have contribution room available.
What if you moved a TFSA from one financial institution to another by withdrawing and then re-depositing?
Then you may trigger an accidental over-contribution. In most cases, an amount that’s withdrawn from a TFSA can’t be contributed to another or the same TFSA in the same year. You must have unused TFSA contribution room before the amount can be re-contributed to your TFSA. Alternatively, you can wait until the beginning of the following year to recontribute – at this point, the amount you withdrew is added back to your TFSA contribution room.
However, let’s say you wanted to stay invested in a TFSA, and you wanted to move your investments from one financial institution to another financial institution. In this case, you can ask the receiving financial institution to complete a direct transfer on your behalf. Connect with an advisor for more detailed information.
Do you pay any income tax on TFSA withdrawals?
No, withdrawals from a TFSA are tax-free.
Do TFSA withdrawals affect your taxable income?
No, since withdrawals are not taxable, you don’t have to include them as income for tax purposes.
What happens if you withdraw funds and later decide to put them back into your TFSA?
You can put money you withdraw back into your account in the same year, as long as you have available contribution room. If you don’t have room, wait and put the money back in the next year. If you contribute more than your TFSA contribution room, you’ll be subject to a 1% penalty for each month you’re over that limit. You can find your personal TFSA contribution room by logging into “My Account” on the Canada Revenue Agency’s (CRA) website.