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How do I transfer $12,000 from my TFSA to an RRSP account and get the biggest tax return?



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It is possible to withdraw money from a Tax-Free Savings Account (TFSA) and then make contributions to a Registered Retirement Savings Plan (RRSP). Before you do, make sure you understand the process and any tax implications.
You can take money out of your TFSA at any time, without paying tax on the withdrawal. Taking money out can affect your TFSA contribution room for the year. Make sure you understand how transfers work. If you are withdrawing investments, such as stocks or bonds, you’ll pay 100% tax on any gains made by swapping investments between your TFSA and a registered account. Here is information about TFSA basics.

There are limits on how much you contribute each year to your own RRSP and your spouse’s RRSP. Your total contribution room for the year is the lower of: 18% of your earned income for the previous year, OR the maximum contribution amount for the current tax year: $26,010 for 2017. Find out more about RRSP contributions.  If you decide to open an RRSP, make sure you understand what happens when you withdraw from your RRSP before you retire.
Speak to a registered financial advisor or tax professional for advice about the options that work best for your investment plan.

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