Here is a nice article, on how you can dinged with a heavy penalty for playing around with your TFSA or more popularly known as Tax-Free Saving Account.

Canadians are being penalized for excess contributions, even though they kept their balances under the $5,000 annual limit.

If you have contributed the maximum to a TFSA and you withdraw any of your money, you must wait until the following year to contribute again.

Removing and replacing money in a single year means you’ll get dinged for 1 per cent of the amount you contributed over the initial $5,000.

http://www.thestar.com/business/article/822383--roseman-taxpayers-hit-with-penalties-on-tax-free-savings-accounts?bn=1

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SS
Reiki Grand Master

Geez man, trust people to screw up such a near-perfect scheme of tax sheltering.
The rules were very clear at the begining - you must wait until next year to re-contribute any withdrawals.
Doing things like this simply give the govt. an excuse to clawback the scheme or abolish it altogether.
Next elections, another political party comes in and says that TFSA is being abused by people so we are dissolving the scheme.
People have been using it as a day trading account, as an alternative chequing account and whatnot.
We all will suffer for the follies of some.

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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"

Hi;

I feel, I am not getting all the benifit of a TFSA account. In my opinion, this TFSA has edge over any simple saving account for following only-

Assuming 2 % interset, tax bracket of 27 %, a saving of 0.27*0.02*5000 =
which is saving of $ 27 in first year, $ 54 in second and so on ...

Is there more than that?

-Ben

yes, the rules were very clear and people have just goofed. however many institutions have also reported incorrectly. they have reported transfers of tfsa from one institution to another as contributions which should not be the case.

secondly, day trading was always ok. cra never objected to that. the problem came up when people abused the tfsa to transact swaps between tfsa and rsp account and in turn transferring all the wealth from rsp to tfsa and withdraw from tfsa and pay zero tax to cra. those people i am sure are in big trouble with cra.

p.s. the 'shift key' has gone 'cuckoo'. so no caps.

Quote:

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Originally posted by pratickm

Geez man, trust people to screw up such a near-perfect scheme of tax sheltering.
The rules were very clear at the begining - you must wait until next year to re-contribute any withdrawals.
Doing things like this simply give the govt. an excuse to clawback the scheme or abolish it altogether.
Next elections, another political party comes in and says that TFSA is being abused by people so we are dissolving the scheme.
People have been using it as a day trading account, as an alternative chequing account and whatnot.
We all will suffer for the follies of some.

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please do not buy gic's in tfsa. what are you saving in terms of taxes. buy stocks - good dividend paying ones or mutual funds.

Quote:

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Originally posted by benparsad

Hi;

I feel, I am not getting all the benifit of a TFSA account. In my opinion, this TFSA has edge over any simple saving account for following only-

Assuming 2 % interset, tax bracket of 27 %, a saving of 0.27*0.02*5000 =
which is saving of $ 27 in first year, $ 54 in second and so on ...

Is there more than that?

-Ben

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Quote:

---

Originally posted by benparsad

Hi;

I feel, I am not getting all the benifit of a TFSA account. In my opinion, this TFSA has edge over any simple saving account for following only-

Assuming 2 % interset, tax bracket of 27 %, a saving of 0.27*0.02*5000 =
which is saving of $ 27 in first year, $ 54 in second and so on ...

Is there more than that?

-Ben

---

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Microsoft - Which end of the stick do you want today?

Quote:

---

Originally posted by pratickm

Geez man, trust people to screw up such a near-perfect scheme of tax sheltering.
The rules were very clear at the begining - you must wait until next year to re-contribute any withdrawals.
Doing things like this simply give the govt. an excuse to clawback the scheme or abolish it altogether.
Next elections, another political party comes in and says that TFSA is being abused by people so we are dissolving the scheme.
People have been using it as a day trading account, as an alternative chequing account and whatnot.
We all will suffer for the follies of some.

---

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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada