The way the TFSA works is that if you have made a contribution. lets say 1,000

and you are able to grow that money to say 2,000,

now you want to withdraw your original 1,000 in this 2009 tax year, you are unable to contribute that 1,000 back into your account in 2009. Because you still had 4,000 room left from your original deposit, you can still contribute 4,000 more in tax year 2009.

Now move forward to 2010 and you are able to contribute another 5,000. But you will also be able to replace the 1,000 that you withdrew in 2009 for a total of 11,000 in your account.

When we file our taxes for 2009, there will be a statement just like the RRSP statement that will tell you how much you can contribute in 2010.

Like anything that has just been established, there will no doubt be some changes to the rules and I think that one that will get changed is the swaps that RES-INVESTOR keeps posting on this board. Look at his posts and he will explain another way to grow your TFSA way beyond its limits.

I have managed to almost double my TFSA since March/April when I was able to catch a lot of cheap stocks right at the time they started to upswing. If there is a pullback this fall, I might liquidate and try to buy again at a lower price. Maybe even look for something that pays income such as an income trust. All the distributions will be tax free and if they are withdrawn, it should add to the amount that I can put back into the TFSA account in the future.

hope that helps