2jack2 Posted September 13, 2011 Report Share Posted September 13, 2011 So the tax free saving account sounds good, no need to lock in the money and don't pay tax on interest. So I opened one account in January 2010, and put $5000 in the account, then something came up and I need the cash, took $3000 out in April, used $1000, then I open another account and put $2000 back. So my total deposit for the year was still $5000, which is the maximum deposit for the year. (that was what I thought) This year, I got a statement saying I had over contributed to my account by $2000 because I cannot take money out and put them back to a different tax free account, this will resulted in over contribution. Here is the kicker, I deposited the $2000 in Late April, they calculated the over contribution by months which is from April to Dec, 9 months X $2000 = $18000. They use this amount to calculate my penalty. This is outrageous, I don't even have that kind of money in all my account combine together. Only our government can comes up ridiculers formula like this to screw people up. Link to comment Share on other sites More sharing options...
Terry Posted September 13, 2011 Report Share Posted September 13, 2011 but if you opened another tax free account, you did over contribute ..... however you are allowed to top your tax free account back up to the amount you took out ,penalty free Link to comment Share on other sites More sharing options...
2jack2 Posted September 13, 2011 Author Report Share Posted September 13, 2011 but if you opened another tax free account, you did over contribute ..... however you are allowed to top your tax free account back up to the amount you took out ,penalty free I realized that now, but it was over by $2000, not $18000, that is what I can't accepted the way how they do the math. Link to comment Share on other sites More sharing options...
Billy Bob Posted September 13, 2011 Report Share Posted September 13, 2011 Here in the USA I learned to line myself up with congressional members (30 years ago)....."THEY" never cut their own throats.... Link to comment Share on other sites More sharing options...
Terry Posted September 13, 2011 Report Share Posted September 13, 2011 I realized that now, but it was over by $2000, not $18000, that is what I can't accepted the way how they do the math. missed that thought it was 1800...LOL that does make a difference.... I mean shouldn't the only penalty be , paying tax on the interest...?? Link to comment Share on other sites More sharing options...
2jack2 Posted September 13, 2011 Author Report Share Posted September 13, 2011 missed that thought it was 1800...LOL that does make a difference.... I mean shouldn't the only penalty be , paying tax on the interest...?? Yeah, so I made some extra interest on my $2000 deposit which was like nothing, now they want the penalty base on $18000. Which is more then the interest I made for the entire deposit for the year. Link to comment Share on other sites More sharing options...
cram Posted September 13, 2011 Report Share Posted September 13, 2011 but if you opened another tax free account, you did over contribute ..... however you are allowed to top your tax free account back up to the amount you took out ,penalty free Pretty sure you can not top it up in the same year....top up in following year(s). Link to comment Share on other sites More sharing options...
crappieperchhunter Posted September 13, 2011 Report Share Posted September 13, 2011 My wife and I have been contributing to it since it was rolled out. I think it is a great tool to help save for retirement. My wife is a banker and has a background in finance so she is the expert..so I really can't help anyone with suggestions about this topic. I however can say with 100% certainty that if you had taken the time to understand completely how the investment works before you go playing around with it...this unfortunate thing would not have happened. Sorry if I seem insensitive. I just have reached a point in my life where I'm a little sick and tired of hearing people complain about how the government or the bank ROBBED them...when in most cases it is just people not taking ownership for a problem that was created through there own ignorance. Link to comment Share on other sites More sharing options...
Billy Bob Posted September 13, 2011 Report Share Posted September 13, 2011 My wife and I have been contributing to it since it was rolled out. I think it is a great tool to help save for retirement. My wife is a banker and has a background in finance so she is the expert..so I really can't help anyone with suggestions about this topic. I however can say with 100% certainty that if you had taken the time to understand completely how the investment works before you go playing around with it...this unfortunate thing would not have happened. Sorry if I seem insensitive. I just have reached a point in my life where I'm a little sick and tired of hearing people complain about how the government or the bank ROBBED them...when in most cases it is just people not taking ownership for a problem that was created through there own ignorance. :good: :clapping: :good: Link to comment Share on other sites More sharing options...
cram Posted September 13, 2011 Report Share Posted September 13, 2011 My wife and I have been contributing to it since it was rolled out. I think it is a great tool to help save for retirement. My wife is a banker and has a background in finance so she is the expert..so I really can't help anyone with suggestions about this topic. I however can say with 100% certainty that if you had taken the time to understand completely how the investment works before you go playing around with it...this unfortunate thing would not have happened. Sorry if I seem insensitive. I just have reached a point in my life where I'm a little sick and tired of hearing people complain about how the government or the bank ROBBED them...when in most cases it is just people not taking ownership for a problem that was created through there own ignorance. I wouldn't be 100% certain. More than 100,000 other canadians made the same mistake, and the CRA ended up changing/augmenting their website and brochures as a result. Link to comment Share on other sites More sharing options...
Raf Posted September 13, 2011 Report Share Posted September 13, 2011 Pretty sure you can not top it up in the same year....top up in following year(s). correct! Link to comment Share on other sites More sharing options...
2jack2 Posted September 13, 2011 Author Report Share Posted September 13, 2011 My point is if I did over contributed for the year, then it should be $2000 for the year, not $2000 times the remaining months of the year and came up with $18000. Link to comment Share on other sites More sharing options...
Rod Caster Posted September 13, 2011 Report Share Posted September 13, 2011 ...sometimes the banks are "nicer" to certain customers as well. From your story, they are not being nice to you and these are not "laws" you broke, just banking customs. If the contribution limit is $5000 yearly, then overcontributions should be based on yearly amounts as well, not monthly. Is this the bank telling you this information, or the CRA? Don't believe the bank and don't hesitate to call the CRA. I withdrew my TFSA for a deposit on my home and they tried to charge me over $100 to "close" the account. I told them to keep $0.01 cents in it or just keep it open at $0.00. They orginally told me I couldn't do either so I wrote them a letter, called a few times and withdrew all but $10 from the account.... they actually GAVE me $100 as an apology. I didnt' expect the gift, but...thank you! Link to comment Share on other sites More sharing options...
2jack2 Posted September 13, 2011 Author Report Share Posted September 13, 2011 This is from the CRA, my "over contubtion" deposit on Apirl for $2000, from April to Dec are 9 months in total, so the CRA came up with $2,000 X9 equals to $18,000. Link to comment Share on other sites More sharing options...
2jack2 Posted September 13, 2011 Author Report Share Posted September 13, 2011 My wife and I have been contributing to it since it was rolled out. I think it is a great tool to help save for retirement. My wife is a banker and has a background in finance so she is the expert..so I really can't help anyone with suggestions about this topic. I however can say with 100% certainty that if you had taken the time to understand completely how the investment works before you go playing around with it...this unfortunate thing would not have happened. Sorry if I seem insensitive. I just have reached a point in my life where I'm a little sick and tired of hearing people complain about how the government or the bank ROBBED them...when in most cases it is just people not taking ownership for a problem that was created through there own ignorance. I accepted that I was over my limit by $2000, not $18,000 Link to comment Share on other sites More sharing options...
Raf Posted September 13, 2011 Report Share Posted September 13, 2011 (edited) I think you missed an all important decimal in your 18000 figure or someone screwed up. it's 1%/month penalty on overcontribution. which works out to $180 in your case. http://blog.taxresource.ca/tfsa-over-contributions/ http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/txtn/txtn-eng.html Edited September 14, 2011 by Raf Link to comment Share on other sites More sharing options...
spooner_jr Posted September 14, 2011 Report Share Posted September 14, 2011 My wife is a banker and has a background in finance so she is the expert..so I really can't help anyone with suggestions about this topic. I however can say with 100% certainty that if you had taken the time to understand completely how the investment works before you go playing around with it...this unfortunate thing would not have happened. So your wife's the expert, you don't understand it, and you're telling him it's his fault for not being aware. Are you the pot or the kettle? The reason you paid such a high penalty is that the CRA charges you a 1% penalty for each month your account is in an overage status. It's a bit of a hiccup in the system. http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=54012&cat=158&IdSection=158&PageMem=&nbNews=&IdPub Link to comment Share on other sites More sharing options...
crappieperchhunter Posted September 14, 2011 Report Share Posted September 14, 2011 So your wife's the expert, you don't understand it, and you're telling him it's his fault for not being aware. Are you the pot or the kettle? Yep my wifes the expert. Lucky me I married someone with looks and brains We work as a team. Somethings in our marriage she is better at then me and visa versa so we trust each other in our respective areas of expertise. Pretty sure thats how a marriage is supposed to work. Call me the pot or the kettle or both if it makes you happy. But I can promise you that you will NEVER see a threat started on OFC by me complaining about how the big bad government or those terrible people at the bank are trying to make me poor. Link to comment Share on other sites More sharing options...
2jack2 Posted September 14, 2011 Author Report Share Posted September 14, 2011 (edited) So your wife's the expert, you don't understand it, and you're telling him it's his fault for not being aware. Are you the pot or the kettle? The reason you paid such a high penalty is that the CRA charges you a 1% penalty for each month your account is in an overage status. It's a bit of a hiccup in the system. http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=54012&cat=158&IdSection=158&PageMem=&nbNews=&IdPub I read all the links, looks like I am not the only one got confused by the government. Thanks for the infor. They really need to have all the information available to the public, (I mean outside of the virtual world), the bank should provide the information to the customers, you see not every one have a wife work at the bank. Edited September 14, 2011 by 2jack2 Link to comment Share on other sites More sharing options...
gogu392 Posted September 14, 2011 Report Share Posted September 14, 2011 I read all the links, looks like I am not the only one got confused by the government. Thanks for the infor. They really need to have all the information available to the public, (I mean outside of the vertral world), you see not every one have a wife work at the bank. Hey man. Here you are the fish, the GOV just hook you up, you got impaled in the hook of TFSA. Next year I bet you will beat this. The way that this TFSA was implemented is typicaly North America. You don't read the fine print you are impaled. Get out of the hook and watch your ass from now on. And welcome to the era of modern slavery (taxation & banks system). Link to comment Share on other sites More sharing options...
lookinforwalleye Posted September 14, 2011 Report Share Posted September 14, 2011 Hey man. Here you are the fish, the GOV just hook you up, you got impaled in the hook of TFSA. Next year I bet you will beat this. The way that this TFSA was implemented is typicaly North America. You don't read the fine print you are impaled. Get out of the hook and watch your ass from now on. And welcome to the era of modern slavery (taxation & banks system). Oh boy! a opportunity to attack the government and taxation!!! Link to comment Share on other sites More sharing options...
gogu392 Posted September 14, 2011 Report Share Posted September 14, 2011 Oh boy! a opportunity to attack the government and taxation!!! I agree, there is no healthy country without a tax system. The problem is that bad management (politicians games/unions) always push to increase taxes. And about banks - sorry mate, those are the masters of slaves, they are at the top of the 'food chain'. See fractional system of borrowing. The bank has the right to print money (mortgage paper), you have have the right to work hard and pay the interest. What I realy like the most is when banks sponsor the wars, both sides. History is full of these cases. I don't see why is not happen today. Anyway the crap is covered in tons of layers that are not accessible to the public and they have a lot of lawers. You can't touch them, actualy they make the law, because Bob/Joe the plumber does not have cash to pay for lobyy. Let's go back to fishing stuf. In other words let's try not to be dinner for the big sharks that make the law. Have fun. Link to comment Share on other sites More sharing options...
Dutch Posted September 14, 2011 Report Share Posted September 14, 2011 If this was about fishing regulations, a lot of people would be saying ignorance is no excuse, should have known the rules beforehand, but I digress..... OP - the government has been lenient with other thousands of Canadians that either didn't bother to understand, or just can't comprehend the concept. Give them a call at 1-800-959-8281 and explain and they may waive the penalty. Link to comment Share on other sites More sharing options...
smally21 Posted September 14, 2011 Report Share Posted September 14, 2011 it wouldn't really be a savings plan if you took money in and out of it all year would it? im surprised you can make a withdrawal at all without penalties..... ie remove and top up i mean. Link to comment Share on other sites More sharing options...
Rod Caster Posted September 14, 2011 Report Share Posted September 14, 2011 it wouldn't really be a savings plan if you took money in and out of it all year would it? im surprised you can make a withdrawal at all without penalties..... ie remove and top up i mean. I imagine the penalties are there because you can make a lot of tax-free gains on risky stocks using a TFSA. The penalties aren't there as a punitive teaching tool on how to save. They tried to penalize me for taking out my original 5 g's and profit after over two years. This was the bank, not the CRA however. Link to comment Share on other sites More sharing options...
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