Year end is already in the not so distant future. Now is the time to review your finances and do some tax planning; triggering capital gains or losses depending upon your individual tax situation is a common occurrence. Something else you can consider is doing some planning around your tax-free savings account.
If you have money saved that could now be used better elsewhere, withdrawals closer to the end of the year work out the best. You have enjoyed the tax free growth of the funds for most of the year, and, due to tax-free savings account regulations, you could replace the funds as early as January 2 next year. If you must withdraw funds, making one withdrawal a year instead of a number of smaller ones during the year is easier to track. It is very important to keep proper track of your annual contributions and withdrawals due to the penalty CRA (Canada Revenue Agency) charges for over-contributions – 1% per month until withdrawn – this can add up to a substantial amount.
You are allowed a tax-free savings account at more than one financial institution, but you must remain within the overall limits. If you have made contributions and withdrawals over time, and are not sure what your limit is, it is best to call CRA and ask what your allowable contribution is. Another option is to sign into ‘My Account’ at CRA and check – it is posted online for you.