TFSA Contribution Limit By Year To 2019

Back in 2008, the federal government announced the creation of a Tax-Free Savings Account (TFSA). The option is meant to encourage Canadians to save with funds that remain accessible, and to generate tax-free income. Therefore, making a TFSA contribution for as much and as often as possible is the best way to pay less tax on your income gains. Moreover, it’s important to know the TFSA contribution limit by year to 2019 to help you maximize your tax-free income. 

TFSA Contribution Limit

How does the TFSA work?

So, a TFSA works like any savings account in that you can contribute whatever money you want (up to a government-set limit). In addition, you can withdraw from it whenever you want, without penalty. And the money, while in the account, accrues interest. However, what sets it apart is that the interest that would typically be subject to taxation in an unsheltered account is tax-free when invested in a TFSA

What is the TFSA limit for 2019?

The TFSA contribution limit for the 2019 tax year is $6,000, up from $5,500 in 2018. But if you have not contributed to a TFSA since it was first introduced, the total maximum contribution limit up to and including the year 2019 is $63,500.

When can you contribute to your TFSA for 2019?

To clarify, you can contribute to your TFSA whenever you want, throughout the year. And all contributions made until December 31, 2019 count toward your limit for 2019. However, any TFSA contributions made after that date count toward your 2020 limit.

What is the TFSA limit for 2020?

For the 2020 tax year, the TFSA contribution limit stays steady at $6,000. But if you have never contributed to your TFSA before, the total maximum contribution limit up to and including the year 2020 is $69,500.

What are the past TFSA contribution limits?

TFSA contribution room changes year after year. For instance, the following graph shows the yearly contribution limit by year to 2019.

Year Limit
2019 $6,000
2018 $5,500
2017 $5,500
2016 $5,500
2015 $10,000
2014 $5,500
2013 $5,500
2012 $5,000
2011 $5,000
2010 $5,000
2009 $5,000

       

Is there a lifetime limit on TFSA contributions?

There is a yearly limit that you can contribute up to. However, the TFSA has no lifetime contribution maximum. So, for as long as you live, you can continue to contribute to your TFSA.

What happens if you over contribute to a TFSA? Is there a penalty?

As with all investment products, there are limits and rules to what and when you can contribute. And if you go above the allotted maximum, there is typically a penalty. Similarly, TFSA over contributions are subject to a tax.

Consequently, if you exceed your TFSA contribution limit for the year, the overage is subject to a one-percent per-month charge. In addition, there is no grace amount that will be left untaxed. With a TFSA, all excess contributions will be taxed on the highest excess amount you carried in the account that month. So it is important to be aware of your TFSA contribution limit by year to 2019. 

How much should I put in my TFSA?

As much as possible! In other words, the more you contribute, the less tax you pay. And the more of your own, hard-earned money, stays in your pockets. In an ideal world, you contribute 20 percent of each paycheque into a savings vehicle, like a TFSA. But, it’s important to know the TFSA contribution limits up to and including 2019 so you don’t over contribute. 

How much can I put in my TFSA if I have never contributed?

If you’re not sure how to calculate your TFSA contribution limit, this graph will enable you to determine what room you have if you have never contributed before. In addition, you will be able to see how much savings you could have accumulated by 2019 had you taken advantage of contributing the maximum from year one. So, here is the TFSA contribution limit by year to 2019.

Year Total
2019 $63,500
2018 $57,500
2017 $52,000
2016 $46,500
2015 $41,000
2014 $31,000
2013 $25,500
2012 $20,000
2011 $15,000
2010 $10,000
2009 $5,000

 

Calculate your TFSA limit

So, there are a few methods you can use to calculate your own TFSA contribution limit up to and including 2019. 

And it’s a fairly easy thing to do if you were already 19 when the TFSA was first introduced in 2008. For example, simply go to the website for the Canada Revenue Agency to see what the max TFSA contribution limit is by year to 2019. In addition, you can take a look at the chart above. On the other hand, if you have already contributed to a TFSA, deduct the total amount of those contributions from the total allowable limit. And the number you are left with is your current maximum allowable contribution. 

Similarly, you can log into your CRA account, and click on the RRSP TFSA tab. Here, you will be able to see your personal TFSA contribution limit. Consequently, the more you take advantage of your TFSA room allowance, the more you will benefit from the savings and income growth. 

In other words, being aware of the TFSA contribution limit by year to 2019, especially if you’ve never contributed, is important. In short, it helps you understand exactly how much room you have available to help contribute to your retirement.

To sum up, TFSAs are a great savings tool if you contribute as much as you can in 2019 and every year moving forward. But the key is to put it there, and keep it there. 

 

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