2023 TFSA dollar limit confirmed at $6,500

[paigemichelle]

@omowunmi You are assuming most people max out their TFSA lol. They don't. You are also assuming people would juste have 7k lying around to dump all at once... rich people maybe, but really not a majority.

 

[ajunkyarddog]

@paigemichelle Lmao how do you make comments like these and then say people making 50k is living a good life fucking

 

[xser88]

@omowunmi Do most people rush out Jan 1? It usually takes me a few days to move stuff around so Incan make it happen. By mid Jan, everything is full but it takes time to move money between accounts etc..

 

[twigagiraffe]

@xser88 I definitely have, but I think I might wait till end of February this year.

 

[amaniax38]

@omowunmi January effect. But more to do with institutional investors selling underperforming assets in December for the tax write off.

 

[consvgentleman]

@omowunmi great question.

 

[tumrub]

@omowunmi VEQT has such high liquidity, and such a low bid ask spread, that even if these things had any effect, it’s negligible.

 

[j4zzy7rombone]

@raffadalbo I miss 2015

 

[kvhiker]

@raffadalbo Random question, if we experienced a deflationary year, could contribution room go lower some year?

 

[carlagrimes]

@kvhiker according to the income tax act for the adjustment factor, it does seem that it's theoretically possible. but it has to be either very big deflation and/or the index has to be very close to $x,250 or $x,750

 

[raffadalbo]

@kvhiker I do not think so. The formula (in section 117.1 of the Income Tax Act) basically says to (a) take last year’s amount and (b) add the adjustment for inflation. If the adjustment for inflation is negative, another provision of the Act (section 257) deems it to be zero, and so the result would be (a) last year’s amount plus (b) zero. Tagging @carlagrimes for their thoughts/comments.

 

[carlagrimes]

@raffadalbo from the link, it doesn't say add though, but to multiply:

(b) the product obtained by multiplying:

(i) the amount referred to in paragraph (a)

by

(ii) the amount, adjusted in such manner as may be prescribed and rounded to the nearest one-thousandth, or, where the result obtained is equidistant from two consecutive one-thousandths, to the higher thereof, that is determined by the formula

(A/B) - 1

where

A

is the Consumer Price Index for the 12 month period that ended on September 30 next before that year, and

B

is the Consumer Price Index for the 12 month period immediately preceding the period mentioned in the description of A.

and there's no mention that the multiplier has to be >= 1. it may be mentioned in other part of tax code, but this 117.1 doesn't mention anything about it.

 

[raffadalbo]

@carlagrimes 117.1(1) adds (a) and (b) to arrive at the current year amount. You’re just showing (b).

(b)(i) is equal to (a) which is last year’s TFSA limit (use $6,500 for simplicity)

(b)(ii) is the result of (A/B)-1. Let’s say that CPI was 150 last year, then it drops to 145. The result of (b)(ii) would be (145/150)-1 = negative 0.03333… this would be deemed nil due to section 257 which says that the result of any negative formula is deemed to be nil.

So the result for (b) would be $6,500 x 0 = $0…. Then the result of the adjustment under 117.1(1) is (a) which is $6,500 plus (b) which is deemed nil, therefore the result is $6,500.

 

[carlagrimes]

@raffadalbo ah ya, that's true. my bad. good thing that i'm not a lawyer (especially tax lawyer), orelse i'd have a lot of unhappy clients.

 

[raffadalbo]

@carlagrimes lol… it’s not easy to read that’s for sure

 

[ssnova]

@raffadalbo I think you have a lower threshold for what "confirmed" means compared to most people here.

 

[raffadalbo]

@ssnova I confirm that your opinion is ok with me.

 

[jaimea1]

@raffadalbo Admittedly dude, you can just say

"I calculated TFSA limit to be $6500"

Or

"Expect..."

 

[raffadalbo]

@jaimea1 Thanks for your feedback.

 

[jesusbeforeyou]

@raffadalbo What's the easiest way to accurately determine my remaining contribution room?