knowledge topics
TFSA Contributions
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define limits related to Tax-Free Savings Accounts.
- Tax-Free Savings Account dollar limit1
- Unused Tax-Free Savings Account contribution room2
- Identify factors that impact Tax-Free Savings Account contribution room.1
- Identify the annual Tax-Free Savings Account dollar limit.1
- For past years
- For current year
- Identify the deadline by which contributions can be made to a Tax-Free Savings Account.
- Identify the sources where Tax-Free Savings Account contribution limits may be obtained.1
- Identify unused Tax-Free Savings Account contribution room.
- Explain how contributions made to a Tax-Free Savings Account affect unused Tax-Free Savings Account contribution room.
- Explain how each of the factors may impact the suitability of contributing to a Tax-Free Savings Account, such as:
- Liquidity required
- Propensity to draw on savings
- Impact of future withdrawals on government benefits
- Impact on cash flow
- Potential for matching contributions by employer
- Opportunity cost of contribution
- Evaluate how each of the factors may impact the suitability of contributing to a Tax-Free Savings Account.
- Explain the tax impact of contributions made to a Tax-Free Savings Account.
- Cash
- Deposit in-kind3
- Transfer from Registered Retirement Savings Plan3
- Estimate the tax impact of contributing to a Tax-Free Savings Account.
- Define excess Tax-Free Savings Account amount (over-contributions).4
- Calculate an excess Tax-Free Savings Account amount (over-contributions).
- Explain the penalty tax imposed by the Canada Revenue Agency on excess Tax-Free Savings Account amounts (over-contributions).5
- Calculate the penalty tax that may be imposed by the Canada Revenue Agency based on a Tax-Free Savings Account excess amount (over-contribution).
- Explain the options available when a cumulative excess amount (over-contribution) for a Tax-Free Savings Account exists.5
- Explain how each of the factors may impact the suitability of withdrawing a cumulative excess amount (over-contribution) from a Tax-Free Savings Account, such as:
- Penalty cost of maintaining excess amount in the plan
- Expected rate of return on investments
- Expected time period for Tax-Free Savings Account contribution room to match the value of the excess amount
- Plans for excess amount withdrawn
- Evaluate how each of the factors may impact the suitability of withdrawing a cumulative excess amount (over-contribution) from a Tax-Free Savings Account.
- Define a Tax-Free Savings Account Return, as required by the Canada Revenue Agency.6
- Identify the deadline by which a Tax-Free Savings Account Return is due.6
- Identify the deadline by which taxes owing due to over-contributions or contributions made while a non-resident are due.7
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally

REFERENCES
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/cntrbtn-eng.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/glssry-eng.html#nsdtfscntrbtnrm
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/nvstmnts-eng.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/glssry-eng.html#xcsstfsmnt
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/txtn/txtn-eng.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/txtn/rpt-eng.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/txtn/nnrsdntcntn-eng.html