Registered Accounts in Practice: contribution rules and tax effects

01

Working out your room in practice

In simple words

Imagine three jars with lines drawn on them. The lines show how much you may put in. A good helper does not guess where the line is. They look at two notebooks, the government's and their own, and use the one that is up to date.

Before this course: TFSA, RRSP and FHSA Explained (Canada) (course 5.3). This course assumes you know what the three accounts are, their 2026 limits and the basic penalties. Here we apply those rules to real situations.

Key facts

Room is per person, not per account. Two TFSAs at two banks share one TFSA room (course 5.3).
The CRA says its numbers may not include your latest transactions, so also check your own financial institution records.
2026 numbers from course 5.3: TFSA dollar limit $7,000; RRSP dollar limit $33,810 (RRSP room is generally 18% of last year's earned income up to the limit, minus any pension adjustment, plus unused room); FHSA $8,000 a year, $40,000 lifetime.
Over-contribution tax: TFSA 1% per month on the excess; RRSP 1% per month on amounts more than $2,000 over your limit.
The CRA says an over-contribution to a TFSA is taxed at 1% per month for as long as it remains in your account. Withdraw the excess as soon as possible, and you must still file a TFSA Return.
Financial institutions report to the CRA by the end of February of the following year, so an excess can exist for several months before the CRA notifies you.

Question	Where to look
How much TFSA, RRSP, FHSA room do I have?	CRA My Account, plus your own records
What did I put in or take out this year?	Your bank or brokerage statements
What is my RRSP deduction limit?	Your latest Notice of Assessment or CRA My Account

In your country

TFSA: 2026 limit CAD 7,000. RRSP: new room is 18% of last year's earned income up to CAD 33,810 for 2026. FHSA (first home): CAD 8,000 a year, CAD 40,000 lifetime.
Source: CRA, TFSA, RRSP and other limits: www.canada.ca/en/revenue-agency/services/tax/registered-plans-administ

401(k) (employer plan): employee limit $24,500 in 2026, plus an $8,000 catch-up at age 50 and over.
IRA (traditional or Roth): limit $7,500 in 2026, or $8,600 if age 50 or over, and never more than your taxable income. HSA: $4,400 self-only or $8,750 family in 2026, only with a qualifying high-deductible health plan.
Source: IRS, 401(k) and IRA limits for 2026: www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-

The personal pension scheme (个人养老金) has run nationwide since 15 December 2024. You can pay in up to RMB 12,000 a year of your own money.
Contributions can be deducted from taxable income, and investment returns are not taxed for now. Withdrawals are taxed separately. Check the current year's limit with MOHRSS.
Source: gov.cn report on the nationwide launch: www.gov.cn/yaowen/shipin/202412/content_6992687.htm

NISA (new system from 2024): gains and dividends inside the account are tax free. Limits are 1.2 million yen a year (tsumitate frame) and 2.4 million yen a year (growth frame), 3.6 million yen in total a year, and 18 million yen for life. Age 18 or over.
Outside NISA, gains are normally taxed at about 20%. iDeCo is a private pension where you pick the investments; contributions are deductible and returns inside it are not taxed.
Source: FSA, NISA special site (Japanese): www.fsa.go.jp/policy/nisa2/about/index.html

Example (math only)

Mia has TFSA room of $5,000 on January 1. She deposits $3,000 in February and $3,000 in October. The second deposit puts her $1,000 over her room. Tax is 1% per month on the $1,000 excess (about $10 a month) for as long as it stays in the account.

Step by step

Sign in to CRA My Account and open the pages for your TFSA, RRSP and FHSA.
Write down the room shown for each account and the date you checked.
Open your bank or brokerage statements and list this year's contributions and withdrawals for each account.
Add anything that happened after the date shown by the CRA.
Work out your real room: CRA room minus recent contributions you have made that the CRA may not show yet.
Check: for every account, you have a room number, a date and a second number from your own records.

LESSON 01Working out your room in practice

LESSON 01 / ANIMATED LESSON / AI VOICE00:00 / 01:00

Voice

Read the video script

[Host] "Your room is not what the app says. It is what the rules say."
[Text on screen: room is per person] "Two TFSAs at two banks share one room."
[Screen: CRA My Account beside a bank statement] "CRA numbers may be behind. Your bank records are the second notebook."
[Text on screen: excess = 1% per month] "Go over, and the excess is taxed one percent a month while it stays in."
[Host] "Check both notebooks before you deposit."

Try it now

Make a table with one row per account: room per CRA, your own contributions and withdrawals since that date, and your real room today.

ClaudeStuck? Copy a ready-made prompt for Claude

Copy this, open Claude, paste it, and Claude will walk you through the lesson step by step.

For a grown-up: Claude is for adults (18+). Copy this, paste it into Claude, and use the answer to explain the lesson to your child.

I'm learning "Registered Accounts in Practice: contribution rules and tax effects" on The Future Market. Lesson 1: "Working out your room in practice".

What the lesson teaches:
- Room is per person, not per account. Two TFSAs at two banks share one TFSA room (course 5.3).
- The CRA says its numbers may not include your latest transactions, so also check your own financial institution records.
- 2026 numbers from course 5.3: TFSA dollar limit $7,000; RRSP dollar limit $33,810 (RRSP room is generally 18% of last year's earned income up to the limit, minus any pension adjustment, plus unused room); FHSA $8,000 a year, $40,000 lifetime.
- Over-contribution tax: TFSA 1% per month on the excess; RRSP 1% per month on amounts more than $2,000 over your limit.
- The CRA says an over-contribution to a TFSA is taxed at 1% per month for as long as it remains in your account. Withdraw the excess as soon as possible, and you must still file a TFSA Return.
- Financial institutions report to the CRA by the end of February of the following year, so an excess can exist for several months before the CRA notifies you.
- Question - Where to look

The exercise I'm working on:
Make a table with one row per account: room per CRA, your own contributions and withdrawals since that date, and your real room today.

I'm stuck. Please:
1. Explain the main idea in plain, simple words with one everyday example.
2. Walk me through the exercise one small step at a time. Ask me what I've done so far before giving the next step.
3. Don't just give me the final answer. Help me do it myself, and check my work when I share it.
4. This is for learning only. Remind me to check with a licensed professional before I make a real decision about my own money, health or legal situation.

I'm a parent helping my child (about 8 years old) with a lesson called "Working out your room in practice" from the course "Registered Accounts in Practice: contribution rules and tax effects".

Here's what the lesson says:
Imagine three jars with lines drawn on them. The lines show how much you may put in. A good helper does not guess where the line is. They look at two notebooks, the government's and their own, and use the one that is up to date.

The activity:
Make a table with one row per account: room per CRA, your own contributions and withdrawals since that date, and your real room today.

Please explain this so an 8-year-old understands: short sentences, a fun everyday example, and no hard words.
Then give me 3 simple questions I can ask my child to check they understood, and a way to do the activity together, one tiny step at a time.
Keep it general and educational. This is not advice for a real situation.

Open Claude

Sources

CRA, Calculate your TFSA contribution room: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-fr
CRA, If you over-contribute to a TFSA: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-fr
CRA, MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and YAMPE: www.canada.ca/en/revenue-agency/services/tax/registered-plans-administ

My notes

I learned this

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