This Financial Literacy Month (FLM) we are talking about money and sharing with you ways to improve your finances through improved tax literacy. Tax know-how doesn’t happen overnight, and that’s okay. Every bit of knowledge you gain can have a big impact on your financial health. We’re here to guide you, one step at a time.

Excess contributions can occur, for example, when your TFSA is set up for pre-authorized contributions and you make additional contributions without verifying the amount of room you have available. This can also be the case when you have multiple TFSAs with different financial institutions and you are not tracking the contributions you are making to all accounts. You can avoid penalties by staying within the TFSA contribution room available to you.

The Tax-Free Savings Account (TFSA) was introduced by the Government of Canada in 2009 to help Canadians save and invest their money – tax-free – throughout their lifetime. This savings vehicle allows for you to set money aside in a TFSA for any purpose – whether you are saving for your education, retirement, a home, or simply for a rainy day, the earnings made in your TFSA will generally not be taxed. You are in control of your TFSA, so you can make contributions and withdraw funds whenever you want without penalty – contributions, however, can only be made if there is available contribution room.