Michael, a 28-year-old Canadian resident, is considering contributing to a Tax-Free Savings Account (TFSA). Which of the following statements about TFSA contributions is most accurate?

Question: Michael, a 28-year-old Canadian resident, is considering contributing to a Tax-Free Savings Account (TFSA). Which of the following statements about TFSA contributions is most accurate?

Answer options:

• He can contribute any amount he wishes, provided he has reached the age of majority. ✅ His TFSA contribution room accumulates starting from the year he turns 18, even if he didn't contribute in previous years.
• Contributions to a TFSA are tax-deductible, similar to an RRSP.
• Withdrawals from a TFSA are taxable if they exceed the original contribution.

Correct answer: His TFSA contribution room accumulates starting from the year he turns 18, even if he didn't contribute in previous years.

Explanation: TFSA contribution room accumulates from the year an individual turns 18, assuming they are a Canadian resident, regardless of whether they actually open an account or contribute in those years. Contributions are not tax-deductible, and withdrawals are generally tax-free.