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TFSA Contribution room VS Taxable Investment Income

At a tax course I recently recommended (VTN, Thanks Joe!) they suggested a good “value add” would be to let clients know they still had TFSA room if they also had investment income, since they could then move taxable income producing assets into the TFSA and in future years not pay tax on that income.

I figured for sure I could add a “snippet” to my client letters that did this comparison automatically.TaxCycle, however, doesn’t seem to have the TFSA contribution room tracked anywhere.

So my work around was to add a custom field called “TFSABalancePerCRAWebsite” (data type “money”, Carryforward “no”, Review message “Required field”).

And then wrote this:

{{#CurrentClient.T1.Income.M[28] >0 or CurrentClient.T1.Income.M[29] >0 or CurrentClient.T1.Income.M[33] >0}}{{CurrentClient.customfield(“TFSABalancePerCRAWebsite”)>0}}
{{Constants.CurrentTaxationYear+1}} Tax Planning opportunity
We note that you have both investment income, and ${{format(CurrentClient.CustomFields.Table[11].CustomMoney)}} of available* contribution room in your TFSA. We suggest you speak to your broker or banker about transferring these investments (up to the contribution room limit) to your TFSA to reduce future taxes on this income.
*Your transactions that were made in 2020 are not included. Your previous year’s transactions may not have been received or processed by CRA and therefore would not yet be reflected in this amount. You should compare the TFSA transaction information we have with your own records to ensure that the information we have on record is correct. Your TFSA contribution room could change if CRA processes additional information.
{{/CurrentClient.customfield(“TFSABalancePerCRAWebsite”)>0}}{{/CurrentClient.T1.Income.M[28] >0 or CurrentClient.T1.Income.M[29] >0 or CurrentClient.T1.Income.M[33] >0}}

For a client with either dividends, interest and/or capital gains and $16000 in contribution room it returns this result:

2020 Tax Planning opportunity
We note that you have both investment income, and $16000.00 of available* contribution room in your TFSA. We suggest you speak to your broker or banker about transferring these investments (up to the contribution room limit) to your TFSA to reduce future taxes on this income.
*Your transactions that were made in 2020 are not included. Your previous year’s transactions may not have been received or processed by CRA and therefore would not yet be reflected in this amount. You should compare the TFSA transaction information we have with your own records to ensure that the information we have on record is correct. Your TFSA contribution room could change if CRA processes additional information.

Feel free to use it, and please let me know if you can think of anyway to improve it!

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The only warning I would add is to make sure this field does not carryforward the balance. Otherwise, if carried forward, it would have a balance and you might unknowingly advise the client of an incorrect TFSA balance next year.

Also, there is a TFSA balance field in the AFR(REP) screen (at the bottom). You’re correct, though, that it is not picked up by the program.

Maybe TaxCycle will make use of the downloaded TFSA information one day, until then this is as close to automated as I could make it.

@Cameron this would be VERY useful as a value added service for our clients!

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Edited to correct link to TFSA Balance (make sure you check your own link and the number in the square brackets will be different depending on how many custom fields you have - you can find this in the bottom left of your screen when you are on the custom field cell), and to make the year carry forward automatically.

Hi @jglass,

I think you might be missing the # sign before the first {{CurrentClient.customfield(“TFSABalancePerCRAWebsite”)>0}}
Shouldn’t it be {{#CurrentClient.customfield(“TFSABalancePerCRAWebsite”)>0}} ?

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@Rein good catch!