What happens if you go over your TFSA contribution limit?

If you exceed your available tax-free savings account (TFSA) contribution limit ($6,000 in 2021), you will be slapped with a tax penalty of 1% per month.

You must file a special TFSA return to determine and report the taxes.

Another thing you can do is to withdraw the excess amount or wait for the new contribution room in the following year.

If you think you are getting close to your contribution limit, you can always withdraw a few hundred dollars and transfer the money to your RRSP or non-registered account.

When you are unsure, you can always log in to your Canada Revenue Agency (CRA) account and find out how much room you have.