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TFSA Contribution Limit to Decline in 2016

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The annual TFSA contribution limit will revert back to $5,500 starting in 2016, Finance Minister Bill Morneau said on Monday.

The announcement was expected as the Liberals pledged to roll back the limit.

However, he noted that the $10,000 contribution limit for 2015 will stay the same.

Also, the limit will again be indexed to inflation in $500 increments. Indexation was originally eliminated in the 2015 federal budget by the former Conservative government.

He also announced the income tax rate for Canadians earning between $45,282 and $90,563 annually will decline to 20.5% from 22%, starting Jan. 1, 2016.

Also, those earning more than $200,000 a year will now face an income tax rate of 33%. Currently, Canadians earning more than $138,586 are taxed at a rate of 29%.

Flickr: GotCredit

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