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rob carrick

If you have yet to take advantage of the $10,000 TFSA contribution limit for this year, there's still time.

You could do it in 2016, or any year after that. The new Liberal government announced Monday that the maximum amount you can put in a tax-free savings account will fall to $5,500 for 2016. But $10,000 still goes for this year, and you can carry that room forward into future years if unused.

"We have certainty that the $10,000 limit for 2015 will remain in place forever," said Jamie Golombek, managing director of tax and estate planning at CIBC Wealth Advisory Services. "That means there's no rush. I've already had two enquiries since yesterday's announcement wondering whether people should be rushing out to put the $10,000 into their TFSAs now before the limit goes back to $5,500."

The federal Liberals campaigned in the recent election on a platform that included a rollback of the TFSA contribution limit. Since the Oct. 19 vote, there's been a dull roar of speculation about how the government would follow through on its promise. Of all the possible options, the government picked the one that is easiest to administer and least likely to further provoke the many people who regard a lower TFSA limit as a serious financial setback.

As of this year, cumulative total TFSA contribution room is $41,000. That's based on $5,000 limits for 2009 through 2012, $5,500 limits for 2013 and 2014 and $10,000 for this year. In 2016, the annual limit of $5,500 will bring the cumulative tool amount of contribution room to $46,500. The government said that the annual limit will be indexed to inflation going forward, as it was before the increase to $10,000.

The Liberals also confirmed Monday that previously announced tax cuts for the middle class and tax increases for high earners will take effect Jan. 1. They also provided some clarity on what will happen with income splitting for families, which was introduced by the previous Conservative government in 2014.

The Family Tax Cut still applies for the 2015 tax year. In 2016, the government will announce its plan to end the program and replace it with a new child benefit plan. The Family Tax Cut applies to couples with children under the age of 18 and unequal incomes. The higher earning spouse notionally transfers up to $50,000 in income to the lower earning spouse, thereby creating a tax credit of up to $2,000.

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