Diving Into Canadian Financial Jargon: How AI Legalese Decoder Can Demystify TFSA, FHSA, and RRSP
- May 21, 2024
- Posted by: legaleseblogger
- Category: Related News
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### Situation Overview
Hello good folks, we are a couple that just moved from USA (we are not US Citizens neither permanent residents). We are permanent residents of Canada (Ontario) since June 2023 but we moved to Toronto in March 2024.
We are opening our TFSA, FHSA, and investments accounts and we can’t find the confirmation regarding our contribution limit for this year. We never filed taxes in Canada as we started getting income in 2024.
Since I can’t open a CRA account for now, how can I confirm the available contribution limit?
**How AI Legalese Decoder Can Help**
The AI Legalese Decoder can assist you in navigating the complex rules and regulations surrounding TFSA, RRSP, and FHSA contribution limits in Canada. By inputting your specific details and circumstances into the AI tool, you can receive personalized and accurate information regarding your contribution limits for each account.
### TFSA Contribution Limit
1. TFSA: Account opened in May 2024. Can I still use the 2023 Contribution limit with 2024 one (i.e 13.5k (7k for 2024 + 6.5k for 2023) or just 2024 contribution)?
**How AI Legalese Decoder Can Help**
The AI tool can calculate your TFSA contribution limit for 2024 taking into account any unused contribution room from previous years. It can provide you with a breakdown of how much you can contribute for the current year while maximizing your available contribution room.
### RRSP Contribution Limit
2. I have an RRSP where my employer matches up to a certain level. How can I determine my contribution limit since this is my first year of income in Canada (and so I can’t use the formula of 18% of last year’s income)? Should I follow the 2024 limit or 18% of this year’s income?
**How AI Legalese Decoder Can Help**
The AI tool can analyze your RRSP contribution limit based on your current year’s income and employer matching contributions. It can determine the maximum amount you can contribute to your RRSP while taking advantage of any allowances specific to your situation.
3. Again, with RRSP, Same question as 1 (TFSA). Am I allowed to carry over 2023 contribution limit?
**How AI Legalese Decoder Can Help**
The AI tool can clarify whether you are eligible to carry over your 2023 RRSP contribution limit into the current year. It can provide you with a detailed breakdown of your available contribution room and guide you on how to best utilize it for maximum benefit.
### FHSA Contribution Limit
4. FHSA: account not opened yet. I understand I can’t carry over 2023 contribution limit. Is this correct?
**How AI Legalese Decoder Can Help**
The AI tool can confirm the FHSA contribution limits and rules for the current year. It can provide you with information on how to set up your FHSA account and maximize your contributions within the guidelines set forth by the government.
By leveraging the AI Legalese Decoder, you can gain clarity and confidence in managing your financial accounts while ensuring compliance with Canadian tax laws and regulations.
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****** just grabbed a
1. 2023 yes carry over
2. check cra after your employer reports your income
3. yes carry over
4. no carry over
if you had no canadian income in 2023 then your rrsp contribution limit for 2024 is $0. if you had any 2023 income you should have filed a tax return for 2023 and your 2024 contribution limit will be on the notice of assessment you should receive confirming your tax return. in general you can carry forward contribution room but in this case you should hold off contributing to your rrsp until you receive the assessment (or until next year where your contribution room will increase to 18% of your 2024 taxable income)
for your tfsa you can contribute 13.5k if you became a canadian resident in 2023. this is based on date of landing however and not the date you were approved for permanent residency. if your landing date is in 2024 your limit is $7k
you are correct you cannot carry forward unused fhsa contributions from last year. you only start getting contribution room upon opening a fhsa account
1 – yes.
2 – if you didn’t work in Canada before 2024 (ie have no previous Canadian income), you have no RRSP room for 2024. You earn RRSP room for the *next* year based on the current year – so your 2024 income will result in RRSP room for 2025.
3 – no. You had no income before 2024 in Canada (as I understand it) so you did not earn any prior RRSP room, and thus have nothing to carry over.
4 – correct.
>We are permanent residents of Canada (Ontario) since June 2023 but we moved to Toronto in March 2024.
Do you mean you were living in Canada in June 2023 or just filed paperwork in Ontario for PR and left and moved back in 2024?