Help for the family budget – know what’s available for you.
Whatever you do for a living– teacher, principal, custodian, administrator – your job is important.
Most parents would agree that their most important job is raising their kids. But providing your children with everything they need to get ahead in life can be financially challenging. Thankfully, there’s help. The government has a variety of programs designed to provide financial support to families. But as they say, “knowledge is power” – it behooves you to make the most of what’s available, or if you have questions, to talk to your financial or tax consultant.
Here are your first 3 steps:
1. Understand the new Canada Child Benefit.
The Canada Child Benefit (CCB) has replaced the old Canada Child Tax Benefit (CCTB) and Universal Child Care Benefit (UCCB), combining them into one payment that is income tested, and tax-free. Families with children under the age of six will receive as much as $6,400 per child per year, and those with kids between six and 17 will receive a maximum of $5,400 under the new plan.
You’ll find more details in our article in The Learning Centre
Did you know? Canada Revenue has a calculator online to help you figure out the amount of tax credits you are eligible for.
2. Save at tax-time: maximize your allowable deductions.
Understanding what you can claim on your tax return, and what you can’t, can save you big-time. It’s wise to talk to a tax expert about whether you qualify for child-related tax exemptions, and to get the most recent information on your tax refunds and credits.
The Children’s Activity Tax Credit – going, going, soon gone. The last time you’ll be able to claim this tax credit is your 2016 tax return, so pay attention. If you, your spouse, or common-law partner paid fees in 2016 to register your child in an eligible activity in 2016, you can claim some of the cost. (Here’s a list of eligible activities.)
Can you claim the Disability Tax Credit? This is a non-refundable tax credit that helps persons with disabilities or their supporting persons reduce the amount of income tax they may have to pay. (More information here.)
Know what child care expenses can be claimed. These are amounts you pay to someone to look after an eligible child, in order that you can:
- earn income from employment;
- carry on a business either alone or as an active partner;
- attend school under certain conditions; or
- carry on research or similar work, for which you are receiving a grant.
Note: The child must live with you when the expense is incurred for the expense to qualify.
- Medical expenses. You can claim medical expenses for dependent children under 18 years old. Check out which are eligible, because they may surprise you. Your birth-related expenses, for example. (Eligible expenses are listed here.)
- Did you adopt? You can claim an amount for eligible adoption expenses related to the adoption of a child under 18 years old. (More information here.)
- Transit pass. You can claim the cost of public transit passes for your children under 19 years old.
- Tuition credits for kids aren’t straightforward. Tuition for children in postsecondary education can be a big credit. However, if your child earns income they must use the amount to reduce their tax to zero. There’s also a maximum that is transferrable to a parent.
- Single parents can claim the “amount for eligible dependent,” (commonly called the “equal-to-married” credit), which is designed to compensate for the lack of a second wage earner in a family. In Ontario, a parent who has at least one child under 18 can claim the credit.
3. If your child is earning income, file a return for them.
That paper route or summer camp job may not have paid your child much, but it may still be a good idea for them to file a return. It may trigger a refund of taxes withheld on their pay cheque. Furthermore, deductions and credits claimed can be carried forward for many years and used to reduce their taxes when they’re older. Filling out a return can even be a teaching moment – it lets kids of all ages learn the importance of filling out a return accurately and on time.
Lastly, no article about finances is complete without a word about budgeting. (Use our budget and calculator tools.)
An Educators Financial Group Financial Planner can help you develop a budget that meets your family’s day-to-day expenses while saving for your future. Talk to us today.