>>932900Okay so the TFSA was introduced in 2009
Now it's 2015
So
2009 = $5500
2010 = $11000
2011 = $16500
2012 = $22000
2013 = $27500
2014 = $33000
2015 = $43000
So you can go to any bank now and open a TFSA account now, and put in $43,000 today itself, and it will be tax free (whatever you make using the $43k).
Now let's say you decided you have some extra dough and you want to deposit $50k, the $7k you deposit will be taxed 1% / month, until it makes up for your contribution limit.
So let's say you opened this TFSA on December 31st 2015, you can put $43,000 into it, but you put $50k because you got extra money.
Since in 2016, the TFSA will go down to $5500 probably, you've actually "over contributed" by $1500. (7 - 1.5 = 5.5)
So, you'll be charged a tax, which is 1% every month, that the "extra" money is in the account.
So since you're opening the account on December 31st, 2015, you MIGHT pay like 1% of $7000, because you've technically contributed "$17000" this year, instead of $10k. So you'll pay like $70 in tax.
Now, on January 1st 2016, since the limit is back to $5500, your $7000 - $5500 = $1500 is that "over contribution" amount again, which means, you'll be charged 1% every single month, on that $1500 until January 1st 2017, at which point, your contribution amount will become positive, so you can contribute $5500 - $1500 = $4000 in 2017, to get back to your "normal" contribution cycle.
Hope I explained it well enough,basically you can only contribute a set amount every year, so if one year you contribute more, you can't contribute the same set amount next year, and you'll have to wait until you're back in the "cycle"
And yeah, if you saved $5500 in your TFSA, for 10 years you'd have access to $55k worth of capital, that is TAX FREE on the gains you make using that capital as long as its CANADIAN shares.
