2018 TFSA Contributions

My monthly contributions towards my TFSA account will be reduced from $800 per month to $700 per month, starting next year.

Here’s why

My cumulative TFSA contribution is almost maxed out. At the end of 2017 I will have $3,800 of unused contribution room that will be carried over to the next year. If the annual TFSA contribution limit will remain the same, then next year I will put $700 per month in my TFSA account. This way I will reach my maximum at the end of 2018 and will have an equal amount of capital to invest every month.

What is TFSA?
TFSA or Tax Free Savings Account is a flexible savings account designed for Canadians. Investment income such as capital gains and dividends earned inside a TFSA is not taxed, even when withdrawn. TFSA contributions are not tax deductible, therefore cannot reduce your taxable income. Investment losses are not tax deductible either. The current annual contribution limit is $5,500. Any unused contributions are carried forward to the next year.

TFSA Contribution Limit
Annual Limit
Total Limit

TFSA Cumulative Contribution Room since 2009
$52,000 – meaning any Canadian who was at least 18 years old in 2009, can open a TFSA account and fund it with $52,000 and start earning income – tax free!


  1. Congrats on maximizing the TFSA. Good achievement

  2. You might want to check out some numbers before you go all in on a TFSA.
    I have used a fairly low ordinary income (My daughter's actual situation) for the following scenario.

    TFSA Tax Scenario

    Ordinary income: $35,000
    Tax (in Ontario): $ 4,723 (from TaxTips.ca)
    TFSA: $52,000
    TFSA Income @3% $ 1,560
    Total tax liability: $ 4,723

    Income: $35,000
    Tax (in Ontario): $ 4,723 (from TaxTips.ca)
    Non TFSA: $52,000
    Dividend Income @3%: $ 1,560
    Total tax liability: $ 4,616

    Taxes saved by using a TFSA: minus $107
    You actually pay more tax by using a TFSA
    You should check it out yourself. I could be wrong. If so could you point out where I have gone wrong?

    1. John,

      When you invest in non-registered accounts, you pay tax on 50% of capital gain and you pay taxes on dividend income, minus the dividend tax credit. In TFSA, both capital and dividend income are not taxed.

      When I look at your second scenario, I don't understand why the tax liability is less. Why is that?

    2. You get the dividend tax credit as a tax refund.