tax-season-couple

The TFSA contribution limit for 2018 will remain $5,500.

The indexation adjustment for personal income tax and benefit amounts is 1.5% for 2018, which is not enough to raise the TFSA limit to the next $500 increment.

In 2017, the Consumer Price Index has fallen from 2.1% in January to 1.4% in October, reaching a low of 1% in June.

With the TFSA limit at $5,500 for 2018, the total room available in 2018 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $57,500.

Read: How to fix TFSA overcontributions

For clients who have withdrawn from TFSAs, their crystallized gains and losses from withdrawals are factored in to their TFSA room. Here’s the formula:

Unused TFSA contribution room to date + Total withdrawal made in this year + next year’s TFSA dollar limit = TFSA contribution room at the beginning of next year

TFSA limits will remain indexed to inflation for future years.

Tax bracket thresholds have also been confirmed. The federal 33% tax bracket will begin at $205,842 in 2018, up from $202,800 in 2017. On the low end, the basic personal amount for 2018 is $11,809, up from $11,635 in 2017.

Also read:

Essential tax numbers for 2018

RRSPs and TFSAs: unused contribution room at death

Watch for this TFSA trading pitfall

Originally published on Advisor.ca
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Bobby

For clients who have withdrawn from TFSAs, their crystallized gains and losses are factored in to their TFSA room.

This is misleading, if not inaccurate.

Crystalized gains/losses within a TFSA are irrelevant to contribution room.

TFSA withdrawals are relevant to contribution room.

Friday, Dec 8, 2017 at 11:21 am Reply

MELISSA.SHIN.1

Hi Bobby, thank you for your comment. The line you quote is referring to withdrawals from TFSAs. As the formula below that line notes, TFSA withdrawals are factored in to their TFSA room. For total clarity, we have updated the language to say “their crystallized gains and losses from withdrawals.” – the editors

Friday, Dec 8, 2017 at 11:37 am