6 tax tips for parents
The article 6 tax tips for parents has a lot more than 6 tax tips so, in the spirit of the title of the article, I’ve listed six that a majority of parents should consider.
1. New parents need a SIN for their offspring to take advantage of benefits and programs to encourage education savings.
2. The Canada Education Savings Grant: The federal government adds 20 cents for every $1 of the first $2,500 saved in an RESP each year. Depending on the family income, the government might also provide an extra 10 or 20 cents on every $1 of the first $500 saved annually in an RESP. The grant has a maximum lifetime limit of $7,200 and is paid out up until the end of the calendar year the child turns 17.
3. Tuition, education and textbook amounts: If there are education-related amounts leftover after the student has claimed all he or she can on their own return, these can be transferred to a parent, grandparent, spouse or common law partner up to a maximum of $5,000. Unclaimed amounts carried forward from a previous year by the student cannot be transferred.
4. Student loan interest: Claim the interest paid on your student loan in 2012 or the preceding five years for post-secondary education.
5. Tell your employer to deduct any child amounts, tuition, education and textbook amounts and amounts for eligible dependants to lower the tax you pay on your paycheque, so you don’t have to wait until your refund to get what’s coming to you. A personal tax credits return shows you what’s covered.
6. Filing a return for children — even those who make just a few dollars babysitting — allows parents to claim deductions and credits on their behalf that may be carried forward indefinitely, providing tax savings in later years when those children’s earnings are high and increasing available contribution room for RRSPs.