“My financial advisor overcontributed to my TFSA—now what?” Oct 24th

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“My financial advisor overcontributed to my TFSA—now what?”

– moneysense.ca

My financial advisor asked me for more money than the allowable contribution room of my TFSA, causing a CRA penalty. I did tell him that I could only contribute the $6,000, but he asked me for $28,500. I paid a fine of $2,000 to CRA.

What happens now? Do I ask him to repay the commissions he received with that investment? I pay him a management fee, but he screwed up and I need to get compensated for this.

Who do I talk to to report this?—Natalie

Sorry to hear about your penalty with Canada Revenue Agency (CRA), Natalie. Before I answer your question, I am going to do a quick overview of the contribution limits for tax-free savings accounts (TFSAs) in Canada, contribution room calculations and potential TFSA penalties.

What is the contribution limit for a TFSA?

If you were born in 1991 or earlier, you have earned $81,500 of cumulative TFSA contribution room as of 2022. If you were born in 1992 or later, your TFSA room began to accumulate the year you turned 18. It is not pro-rated in the first year and continues to accumulate each year thereafter…

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