Tax Tips for Canadians with Children

It’s almost that time of year again, tax time. Are you prepared?

For us, it’s an especially chaotic time with both business {x2} and personal {x2} taxes. Oy! It used to be a very stressful and confusing time of year, yet I see it now as hardly a bump in the road. You see, I fully admit to going about my personal taxes all wrong the first year I was a parent. Yet, knowing simple facts and important Tax Tips for Canadians with Children, really lifted the burden and saved me a lot of money over the years.

Saving money? Ya, who doesn’t want that end result?!

Here are the Tax Tips for Canadians with Children you need to know:

• Claim the kids: Families will continue to benefit from a $2,191 Child Tax Credit for each child under the age of 18. This will result in a federal tax saving of $328 per child. And if one parent cannot use the entire amount to lower their tax payable, the unused amount can be transferred to a spouse or common-law partner.
• Credit for being active: The Children’s Fitness Amount is a non-refundable credit is worth up to $500 for children under the age of 16 enrolled in an eligible program of physical activity. Not every program meets the eligibility guidelines so you need to ensure you know the requirements. Make sure you keep your receipts. Disabled children will also qualify for the credit if they are under 18. Manitoba, Yukon, Ontario, Nova Scotia and Saskatchewan also have a provincial fitness credit.
• Artistic credit: The new Children’s Arts Credit is another non-refundable credit worth up to $500 for children under the age of 16 enrolled in an eligible program. This could include language classes, Girl Guides or Scouts, art classes or ballet lessons. Again, keep your receipts to make the claim.
• Universal Child Care Benefit: This is available to any family with children under the age of six regardless of the household income. Each child under six is eligible for the $100 per month benefit. UCCB is taxable in the hands of the lower-income spouse.
• Child Tax Benefit: Upon the birth of a child, parents should complete Form RC66, Canada Child Tax Benefit Application and send it to the CRA. This form will register their child for the GST/HST Credit and Universal Child Care Benefit (UCCB) as well as the Child Tax Benefit.
• Use public transit: Taxpayers who use public transit can claim a non-refundable tax credit for their passes. This includes passes purchased for dependent children under the age of 19. The passes have to be for a period of at least one month or weekly passes purchased over a period of four consecutive weeks. Electronic payment cards also qualify.
• Save for future education: Designed to help save for a child’s post-secondary education, parents can make up to $50,000 RESP lifetime contribution. Canada Education Savings Grant (CESG) per year is $500.
• Registered Disability Savings Plan: The RDSP was introduced to help families save for the financial security of a disabled family member. There are great incentives provided to encourage people to open RDSPs like Canada Disability Savings Grant, which will provide matching government contributions. For a lower income family, a one-time Canada Disability Savings Bond will provide an initial government contribution of up to $1,000 to kick-start the plan.
• Canada Learning Bond: Designed to help lower income families the Government provides $500 in a CLB at birth for children whose families are entitled to the National Child Benefit Supplement. As long as the family is still entitled to the supplement, they will receive an additional $100 CLB each year until the age of 15.
• Get a SIN: Apply for a social insurance number upon a birth of the child. You will need this in order to open an RESP. It will also be required even for minor jobs such as babysitting or paper routes. Money earned from this type of employment qualifies for the calculation of an RRSP deduction limit.

My favorite has got to be that Fitness Amount. Ballet classes, soccer lessons, swimming classes – such great motivators to get those kids active, when it’s a tax credit. We always aim to use up all the fitness amounts for each child.

Now, what are your plans for tax season?

One option is H&R Block at Home, it can make the transition to electronic filing painless. Built by the tax experts, the software provides step-by-step tips to identify every possible deduction or credit and ensures the maximum refund.

For your 2012 tax return, H&R Block offers downloadable software and online tax filing – both of which provide easy to use guidance that ensures Canadians receive the maximum refund. Switching from another software product is easy since H&R Block At Home automatically imports data from previous years.

H&R Block At Home online costs $15.95 for the first return, $10 for the second and any additional returns are free. Like the downloadable version, the online product is certified for NETFILE by CRA, guarantees accuracy and helps Canadians get their tax refunds in as little as eight days.

For those who would prefer to keep their tax files on their own computer, using a downloadable software package is suggested. Available at hrblock.ca for $29.99, this option allows users to prepare up to 16 personal tax returns of any type, including capital gains and losses, rental-property income, child-care expenses and multiple small business returns.

H&R Block At Home Tax downloadable software also offers the confidence and convenience of knowing that H&R Block is behind you the whole way with the added features of:

• Free Audit Assistance – Should you receive a review request from the CRA, H&R Block is behind you, as tax professionals can take care of the request and help with any further CRA correspondence.
• Free “Canadian Tax Tips for Dummies”: Download helpful pointers on how to reduce the tax you pay so you keep more of your money and find answers to the most common Canadian tax questions; and
• Free SOS online backup: Back up all your photos, documents and important computer files important files free for a year with the industry’s top rated backup solution, ensuring you are safe from hard drive failure, computer theft, and fire.

Regardless of how Canadians plan to file their taxes, Hamel notes that no one wants to pay more tax than they have to. “No matter how you prepare your return, you need to understand the tax changes that affect your situation and how to save the most in taxes. Do not wait until April 30 to begin.”

It’s true – start thinking about this now and take the steps needed to get this done ahead of time. Waiting until the last minute is unnecessary stress, so prepare early!

WIN IT:  Six {6} Canadian readers are going to get a H&R Block at Home code, allowing them to file taxes online from the H&R Block website for free.

TO ENTER: Fill in the form below with your qualifying entries. Good Luck!!

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Disclosure: I received product to facilitate this review, all opinions are my own.

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