Ten TFSA questions answered

Everything you need to know about the investment account

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17 comments on “Ten TFSA questions answered

  1. I was curious if I can add back commissions or trading fees to my TFSA toatals. If I put 5500 in this year, make three trades and pay $30 in trade costs. Can I add $30 more into the TFSA ?

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    • No, any costs that eat up cash from your TFSA use up that contribution room and are gone forever. It’s no different than investment loses in TFSA. So it’s in your best interests to keep any of those costs low.

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      • I buy shares in my cash acct and then transfer the shares to my tfsacomission free and at the lowest price of the day

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  2. hi
    I find the comments for slide #5 misleading regarding dividend stocks inside a TFSA. You say by holding dividend stocks inside a TFSA “you will miss out on the tax credit”. Yes, that is technically true. But dividend paying stocks inside a TFSA don’t need the dividend tax credit because all income earned inside the TFSA is tax-free. That is the more straight-forward message needed for this slide. And the answer to the slide’s question should not be “not quite”. There is NO penalty to hold dividend stock in a TFSA. Again, because no tax is paid in a TFSA. From your web site: “Once an investment is in a TFSA, M., any income or capital gains thereafter are entirely tax-free. Withdrawals are also tax-free. TFSAs are all about tax-free returns, so they’re a sure-fire way for you to avoid capital gains tax”

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    • Too true. It often seems that a lot of these personal finance stories and their attempts to optimize tax don’t look at every option. They just look at what has apparently become the rule of thumb, created by whoever. And too often, these rules of thumb seem to be about paying the absolute lowest percentages of tax, but in turn, what are you sacrificing?

      One rule is, if you have Canadian dividend stocks, make sure you get the take credit by keeping it in a non registered account. As you point out, this isn’t necessarily correct. You might want to pay no tax as opposed to get a credit and pay some tax. Another might be to hold basic interest bearing items in a TFSA since interest is taxed at a higher rate. Well no, wait a minute. Don’t we want some GROWTH in our TFSAs? It’s great that I can save a greater percentage of tax by keeping my savings, GICs, or even bonds in a TFSA, but I would keep it to an absolute minimum, or perhaps not at all. Sure, you may be paying that higher percentage outside on interest earned outside of registered accounts, but those kinds of investments are not going to grow as much anyway.

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  3. Having to click each photo, then click to read the answer is a pain. I’d much prefer to be able to scroll and read the article in a civilized manner. Thanks.

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    • especially since the slides take forever to load.

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      • Hi Leslie, sorry that the slides are taking a while to load for you. Try viewing the gallery on your smartphone. This way, it is viewable as a list to scroll through, rather than a gallery. Hope that makes the experience a little better for you. Thanks for reading!
        -Prajakta

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        • I would also like to read it by scrolling down. The slides are time-consuming, and do not encourage reading the whole article.

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        • Where is the scroll option or full page option. The slides are annoying. You have to click and expand each time. This site is poorly designed. .

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          • Hi Soma, try reading the article on your smartphone or reducing your browser size to its smallest width. That should do the trick.

          • Why can’t we select the mobile/full document view on a tablet or computer?

  4. What happens to a TSFA after you die?

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  5. I made my 2017 TFSA contribution with a transfer of equities from my regular (taxed) brokerage account. Between requesting the transfer, and it being made by the discount broker, the equities increased in value creating a small over contribution (under $100) What if anything should I do about this? Will I be penalized?

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    • I have make a full contribution to my TFSA. I made $10,000 capital gain. If I withdraw $10,000 this year. Can I put $10,000 back in the account next year?

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  6. If I purchase 5000 shares of a stock in my TFSA and at a later date sell 5000 shares of the same stock from a non registered stock account which creates a capital loss is this loss eligible for net capital gains reduction if the time lag between these 2 transactions is less than 30 days?

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