In 2024, Michael, aged 40, has $15,000 in unused TFSA contribution room. He also has an RESP for his 5-year-old daughter, Emily, with $10,000 contributed by him. If Michael plans to contribute to both his TFSA and Emily's RESP this year, what is the maximum amount he can contribute to his TFSA without incurring an over-contribution penalty, assuming he has not contributed to his TFSA at all in 2024 yet?

Question: In 2024, Michael, aged 40, has $15,000 in unused TFSA contribution room. He also has an RESP for his 5-year-old daughter, Emily, with $10,000 contributed by him. If Michael plans to contribute to both his TFSA and Emily's RESP this year, what is the maximum amount he can contribute to his TFSA without incurring an over-contribution penalty, assuming he has not contributed to his TFSA at all in 2024 yet?

Answer options:

• $7,000 ✅ $15,000
• $22,000
• It depends on the amount he contributes to the RESP.

Correct answer: $15,000

Explanation: TFSA contribution room is independent of RESP contributions. Michael's maximum TFSA contribution is his accumulated unused room, which is $15,000, plus the new room for 2024 ($7,000), totaling $22,000. However, the question asks for the maximum he can contribute without incurring an over-contribution penalty given his current unused room, which is $15,000.