We can all agree that raising a family is one of the greatest experiences ever but it can also be quite expensive. With after school piano lessons or hockey on the weekend, extracurricular activities can start to add up. Fortunately, there are ways to reduce your tax bill this season and help with some child-related expenses. Cleo Hamel, senior tax analyst at H&R Block Canada, offers the following tax advice for Canadian families:
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.
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.
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.
The lower income spouse should claim all the medical expenses for a family to maximize the tax savings. Remember that premiums paid for your company healthcare plan, deductibles and medical travel insurance are all considered medical expenses for tax purposes.
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.
Keep all your receipts for childcare expenses. From daycare to nannies, childcare expenses can be claimed by the lower-income spouse. Unfortunately, any unused amount cannot be claimed by the higher-income earner unless there was a period of separation of 90 days or more or the other spouse was in school, prison or the hospital.
Hamel stresses the importance of keeping all your receipts to ensure you can claim everything. Though the tax savings will certainly never equal all the expenses of raising kids, every extra dollar helps. To help you save a little more this tax season, H&R Block Canada is very generously offering three lucky Mommy Kat and Kids readers an H&R Block at Home code that will allow the winners to file their own taxes online on the H&R Block website absolutely free! To enter to win, just leave a blog comment about whether you usually do your taxes yourself or hire a professional.
Do your homework and avoid missing out on any money-saving credits by using tax preparation software, like H&R Block At Home (www.hrblock.ca), which guides Canadians through step-by-step tips to identify every possible deduction or credit, calculates your return as you go, and ensures you get your maximum refund. If you aren’t comfortable doing your own taxes, bring it into an H&R Block office and a tax professional will review your return for free.