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Hey all,

There's been a lot of news lately about people over-contributing and then getting dinged by the CRA because they weren't aware of their mistake.

So hypothetical question: What do you do if you ARE aware you made a mistake? Like, you typed an extra 0 into your browser and accidentally moved 100K into your TFSA on Jan 1. You go, whoops! And then what? Are you simply boned for the rest of the year? Because even if you withdraw EVERYTHING and close the account, won't the CRA not care and still consider you over-contributed by 90K for 12 months?

Again, hypothetical question. I didn't actually do that, but I'm starting to believe under the current system, even if people were perfectly aware of the rules and a clerical error occurs, there's literally no way to fix it. Even with RRSPs if you were to accidentally withdraw, you could just jam it back in and all would be well.

This would be a pretty bad risk associated with TFSA's, as the penalty for mistakes like this could be ridiculously high. In my example, that extra 0 would be worth $10800.
 

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You only get taxed upon every month that you have registered an overcontribution.

As per your example of the Jan. 1st contribution, yes if you leave it there for the entire year. You are taxed for an overcontribution for the entire year. If you withdraw it later in January, you are only taxed for the month of January.

It is in some of the articles/links that have been posted.
 
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