The Importance of Paying Attention to Financial Statements

I’ll relate my experience to underscore the significance of paying attention to your finances – not just the saving and investing parts but also the all-important records of those money transfers/contributions.

I contributed to my TFSA account for 2009 in May of that year and rested in content that I had been prudent in taking advantage of the newly introduced savings vehicle. Since financial institutions do not issue an official contribution receipt for TFSAs like they do for RRSPs, I viewed my monthly statement, verified that the contribution was listed and let it be.

Fast forward to Feb 2010: I filed my income tax return and the tax software (forms) did not have any line about TFSAs. I figured that financial institutions would report to the Canada Revenue Agency (CRA) directly and I had no further part to play.  Read More…

This article has 8 Comments

  1. Ulrick L

    So from what i understand you can make deposits/withdrawals at any time but there is a set limit of $5000 each year. But if your combined deposits equates to $5000 then anything beyond that will get taxed on any interest it earns. So if my balance is below $5000 but my accumulated deposits over the year is $7000 then will i get hit in charges for the $2000?

  2. Bernard

    Paying attention to financial statements applies to anything in life not just tax-free bank accounts. One would be best served to read anything and everything when it involves investing your own hard-earned money. Sadly, most don’t.

  3. Conor V

    I was hit hard with penalties for constantly withdrawing and depositing. What was annoying was that my bank (RBC) didn’t let me know the restrictions and possible penalties until i found out by accident from friends. Damn bank just wanted to make more money off me.

  4. Arly C

    I actually didnt start contributing until February of this year. My contribution limit is $10,000 since i did not use it in 2009 so it carries over to 2010 for an additional $5000.

  5. Omari

    Good read

  6. Carlo H.

    Thank goodness the revenue agency had issued a statement that those who contributed in the 2009 period would not see tax penalties due to misinformation that was out there.

  7. Pavel S

    TFSA accounts can be a tricky thing if you dont read the fine print.

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