Tax Free Savings Account Limit Increase
At Aurora Workplace Solutions, we are about creating brilliant futures by developing wealth security for businesses and individuals. As experts in the industry we keep on top of recent news including changes to relevant group benefit plans, retirement savings options, and guidelines and policies. One of the more recent releases in the news were some changes to contribution limits for Tax Free Savings Accounts (TFSA).
A (TFSA) is a great tool available to help you meet your long term savings goals, whether it be for your retirement or to purchase a home. TFSAs offer the flexibility to make withdrawals without penalty and are often used alongside an RRSP as part of our suggested retirement plan portfolio. New limits for 2019 have been released and the information can be found below!
The TFSA contribution limit for 2019 is $6,000, up from $5,500 in 2018.
With the TFSA limit at $6,000 for next year, the total room available in 2019 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $63,500.
The anual TFSA dollar limit is indexed to inflation and rounded to the nearest $500. The Canada Revenue Agency’s indexation increase for 2019 is 2.2%.
For clients who have withdrawn from TFSAs, their crystallized gains and losses from withdrawals are factored in to their TFSA room. Here’s the formula:
Unused TFSA contribution room to date + Total withdrawal made in this year + next year’s TFSA dollar limit = TFSA contribution room at the beginning of next year
Tax bracket thresholds for 2019 have also been released. The federal 33% tax bracket will begin at $210,371 in 2019, up from $205,842 in 2018. On the low end, the basic personal amount for 2019 is $12,069, up from $11,809 in 2018.
If you have questions about a TFSA or your current contribution amounts; contact one of the experts at Aurora Workplace Solutions. Let us work with you to determine how you can meet your financial goals and make your money work for you.