The increased TFSA limit for 2023 “is great news to those who have the resources to utilize their full contribution room,” said Aaron Hector, private wealth advisor with CWB Wealth in Calgary, in an email.

With today’s TFSA limit announcement, the total contribution room available in 2023 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $88,000.

The annual TFSA dollar limit is indexed to inflation and rounded to the nearest $500. The Canada Revenue Agency’s indexation increase for 2023 is 6.3%, up from 2.4% in 2022.

For clients who have withdrawn from TFSAs, their crystallized gains and losses from withdrawals are factored in to their TFSA room. The formula is:

Unused TFSA contribution room to date + total withdrawal made in this year + next year’s TFSA dollar limit = TFSA contribution room at the beginning of next year

Here are the dollar amounts by year:

Anyone 18 or older and who has a valid social insurance number is eligible to open a TFSA. Contribution room begins accumulating in the year in which a person turns 18.

Federal tax bracket thresholds for 2023

Federal bracket thresholds will also be adjusted higher in 2023.

• The 33.0% tax rate begins at taxable income of over $235,675, up from $221,708 in 2022.
• The 29.0% tax rate begins at taxable income of over $165,430, up from $155,625 in 2022.
• The 26.0% tax rate begins at taxable income of over $106,717 up from $100,392 in 2022.
• The 20.5% tax rate begins at taxable income of over $53,359, up from $50,197 in 2022.
• Income up to $53,359 is taxed at 15.0%.

Excluding the effect of any available tax credits claimed, someone who earns $100,000 in 2023 will pay approximately $174 less in tax than someone who earned the same amount in 2022, Hector said.

The basic personal amount for 2023 is $15,000 for taxpayers with net income of $165,430 or less. At income levels above $165,430, the basic personal amount is gradually clawed back until it reaches $13,521 for net income of $235,675.