CRA confirms TFSA limit for 2018

The TFSA contribution limit for 2018 will remain $5,500.

The indexation adjustment for personal income tax and benefit amounts is 1.5% for 2018, which is not enough to raise the TFSA limit to the next $500 increment.

In 2017, the Consumer Price Index has fallen from 2.1% in January to 1.4% in October, reaching a low of 1% in June.

With the TFSA limit at $5,500 for 2018, the total room available in 2018 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $57,500.

Read: How to fix TFSA overcontributions

For clients who have withdrawn from TFSAs, their crystallized gains and losses from withdrawals are factored in to their TFSA room.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

TFSA limits will remain indexed to inflation for future years.

Tax bracket thresholds have also been confirmed. The federal 33% tax bracket will begin at $205,842 in 2018, up from $202,800 in 2017. On the low end, the basic personal amount for 2018 is $11,809, up from $11,635 in 2017.

Also read:

• Essential tax numbers for 2018
• RRSPs and TFSAs: unused contribution room at death
• Watch for this TFSA trading pitfall

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.