How Is TFSA Contribution room determined? Do ALL withdrawals increase the max? | Page 2 | Tax Free Savings Accounts | Discussion forum

smayer97 said
BTW, this means that withdrawing all funds and re-deposited them at another FI is far better than a simple transfer of the TFSA to a new FI, as that seems fraught with delays and problems vs a manual w/d and deposit, which is faster and you have more control over the process.  

Exactly. In December. See https://www.highinterestsavings.ca/definition/tfsa-december-manoeuvre/

Yes true. The solution is take all funds out in December. Deposit funds in a different FI's TFSA in January. You may collect some interest December 31st depending on deposit type. GIC's, SA, or HISA. Even with $75,000 in a TFSA I doubt you would collect $2,000 interest annually. In January remove December 31st interest. Your deposit in January is $6,000 less December interest. Say $6,000 less $2,000. The extra can be deposited the following year. I remove the interest/dividends from TFSA that provides ZERO return on a regular basis.

I closed an RIF at Tangerine in December once - just cashed it out, as you are all thinking of doing with TFSA. It was in cash.
However, Tangerine would not calculate the interest to date for December. Instead, I was stuck with about five dollars in that account still in January. I made sure I cashed it out as soon as the January interest was posted. It was a nuisance though. Tangerine sent me a T slip for that five bucks - a waste of money for them and a nuisance for me! The idea that one might cash out seemed to bewilder them.

That was funny Loonie about Tang's bewilderment on you cashing out a RRIF with them.

All three of my small RRIF's with them have or will be maturing by end of Nov. I don't think I'm going to cash them out, but I will be putting all into a DISA RRIF then probably transfer them to Oaken or Motive.

Then, I will just have a couple of TFSA GIC's with them, currently at over 3% and one unregistered GIC. After they mature, I will most likely "leave Dodge).

I have opted to get their Money back M/C to take advantage of the 10% on purchases, but then probably won't use it again. My offer of 8% on all purchases at CIBC VISA just expired end of June. It was a better offer in some ways.

Anything to "keep busy" whilst waiting for rates to rise!!

It’s very simple! Add up the contribution limits for every year you were 18 and older and that’s your total limit. Every single withdrawal amount whatever the value can be recontributed the next calendar year or later. Gains are not a separate issue. If you contribute the max every single year and you are a very savvy stock investor and your TFSA value has grown to a value of 1 million dollars, you can withdraw all of it and redeposit 1 million dollars next year plus the new year contribution amount.

That’s it!
Simply keep the rows of numbers in your records, what is the official contribution limit each year, what you contribute each year, and what withdrawals you make each year. The numbers just need to add up. I’ve made contributions in various years that include 29 cents on the end of a whacky number and have never been wrong with the CRA. I always fully contribute each year, including last year withdrawals so it’s easy, it may get more complicated if you don’t fully contribute each year or don’t fully recontribute previous year withdrawals.

I think Tangerine doesn't fully appreciate that it's OUR money, not theirs, and we can do what we want with it!

Before I tried to close down my RIF, I had to convert it from RSP, for pension splitting purposes. Knowing it would be a two-stage process, I started earlier int the year with the conversion. I was told that such conversions were not my concern, that they would happen automatically towards the end of the year in which I turned 71. It WAS the year in which I turned 71, but I wanted the conversion done early so I would have lots of time to close it down. (A bad experience with Scotia had convinced me this was a necessary precaution.)
Tangerine staff appeared to have never executed such a conversion before and kept insisting it wasn't necessary, just as I insisted it was. I became rather irritated that they didn't appreciate the concept that it was MY money and I could convert it whenever it suited me. Eventually, after consulting various managers, they relented and figured it out.

At Hubert, this gets done immediately, no questions asked. And they cheerfully execute my requests to forward a specified (above minimum) amount to CRA.

savemoresaveoften said
Keep in mind when you go to CRA to check ur TFSA contribution room, its one of those numbers that are very very very slow to update to reflect the true number.
Trust and keep your own record over theirs for sure.  

Contribution room is updated by March 1 for withdrawals from previous year.

Here's CRA info:
"Your TFSA contribution room information can be found by using one of the following services:
My Account for Individuals.
MyCRA at Mobile apps – Canada Revenue Agency.
Represent a Client if you have an authorized representative.
Tax Information Phone Service (TIPS) at 1-800-267-6999.
In addition, if you want to receive a TFSA Room Statement, call us. You can also ask for a TFSA Transaction Summary that shows the information that we received from your TFSA issuer(s) about your contributions and withdrawals.
If the information that we have about your TFSA transactions is not complete or if you have made contributions to your TFSA this year, use Form RC343, Worksheet – TFSA contribution room, to calculate your TFSA contribution room for the current year. If we have deemed your unused TFSA contribution room to be a specific amount, do not use this form; call us for more information.
You must keep records about your TFSA transactions to make sure that your contributions do not go over your TFSA contribution room. We will keep track of an individual's contribution room and determine the available TFSA contribution room for each eligible individual based on information provided annually by the TFSA issuers."

In my case CRA has been to the penny since day one, 100% accurate, I've had lots of ins and outs, and naturally they can't have Dec 31 snapshot for a few months to give fi's time to report previous year's activity.

Smayer: To be more specific, I am among those who HAS in fact withdrawn money and then contributed back MORE than my cumulative first-deposit eligibility. I think we've provided you enough examples. The principle is fair and clear - you never lose eligibility by withdrawing and re-depositing.

I caution those planning December moves to be aware than withdrawals can be processed VERY slowly. Tangerine once took over three weeks, with a PHYSICAL CHEQUE being sent from Toronto. I lost weeks of interest and the receiving institution, in January, had to back-date the transaction.
RetirEd