what is tfsa contribution room

A Tax-Free Savings Account (TFSA) is a registered account that allows Canadians to save, invest, and withdraw money without paying taxes. Your TFSA contribution room is the maximum amount that you can contribute to your TFSA. The contribution room accumulates every year, even if you havent opened a TFSA. The annual TFSA dollar limit for 2023 is $6,500. If youve never deposited to a TFSA, you can contribute up to $88,000 if you were 18 years of age or older in 2009. Your contribution room consists of the current years contribution limit, any unused contribution room that you have accumulated from previous years, and the total value of TFSA withdrawals made in the previous year. All contributions made during the current year to your TFSA, including the re-contribution of withdrawals, count against your contribution room. Its important to keep track of your TFSA contributions and withdrawals because there are penalties for over-contributing.