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Discussion Starter #1
I have a question that has been answered in 2 ways to me by different people, hopefully someone here can clear this up!
I take out $30,000 sept 2020 from tfsa trading account to help purchase a vehicle.
I have been told I can put in $30,000 + $6500 back in after Jan 1, 2021.
Others have told me I can put in $6500 Jan 1, 2021 and then the other $30,000 September 2021.
Is there a very straight forward clear answer to this?
 

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If Jenny wishes to re-contribute part or all of the $3,000 she withdrew, she will have to wait until the beginning of 2020 to do so. The $3,000 will be added to her TFSA contribution room at the beginning of 2020.
Based on this, the contribution room is calculated at the beginning of each year. That means you can withdraw $30,000 in December 2020 and the put that money back in January 2021.
 

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A simple answer is really not possible from the info provided as it is tied to what your particular situation.

Here are the two extremes to illustrate the range.

The first is that you have used up all your TFSA contribution room in 2020. In this case, the $30K withdrawn in 2020 will become TFSA contribution room Jan 1st, 2021. There will also be the 2021 TFSA contribution room allotment (assuming one is a resident plus meets all the other critera). Personally, I doubt the 2020 annual amount of $6K will be bumped up in 2021 to $6,500 but time will tell. AFAICT, the 2021 amount will be announced in late Dec.

The other extreme is where you have $30K of unused TFSA contribution room. If so, you can put the $30K back as soon as you have it in 2020 as the unused TFSA contribution room will cover the re-contribution.


Keep in mind it's a range so there may be something more like $10K of unused TFSA contribution room where $20K of the total will have to wait for 2021.



Cheers

PS
I missed that one of the answers says the $30K has to wait for Sept 2021 ... this is false. The addition of TFSA contribution room from previous year withdrawals and the annual allotment happens Jan 1st.

If you have any doubts about this (MrBlackhill has provided links), I think I'm up to around five Dec 15th withdrawals followed by Jan 3rd re-contributions plus the annual allotment with no issues. I was moving money from my deposit TFSA to my brokerage TFSA where I wanted to avoid the brokerage transfer fee (withdrawals are free).
 

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Discussion Starter #4
Thanks for the links, clears everything up. Did not want to wait until september to replace my tfsa withdrawal !!
 

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I was transferring to another firm. CIBC would charge me $150. to transfer or nothing to withdraw the money. I withdrew in mid December. As I recall the information about the $150 was not at all obvious when I first read it the data sheet. Did the same with my spouses account.

I deposited the exact amount to an account in another institution in Jan. Plus the contribution that was permitted for the year. No issue whatsoever.
 

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What I remember when TFSAs were first started is that the deposit TFSA had free withdrawals while the brokerage one had one free per year then additional withdrawals had a fee. Tranfers were in the $150 range.

The withdrawal fee I can recall being told about. The transfer fee had to be dug out of the fee schedule but in my case, wasn't hard to find.

A couple of years later the "one free" was changed to "all withdrawals free", likely due to competition.


One of the message boards, likely CMF pointed out that the transfer fee could be avoided by a Dec withdrawal and a Jan re-contribution (the surefire way to know one was not at risk of an over-contribution penalty).


Cheers
 

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That is exactly what we did. $300 ($150 x 2) of after tax dollars remained in our pocket rather than the banks. To be fair, there is an admin cost to them in completing the forms and moving the funds to another institution however it only took a visit to the bank and five minutes of our time to avoid the charges.
 

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I'd have to check but IIRC, it's more like $750 saved for me.

I think I might have visited the bank once. Most of the time it was an online moving of TFSA to chequing then after switching online accounts, pulling the funds over to a different chequing account then an online move into the brokerage TFSA.


Cheers
 
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