Download Helping parents save on taxes

Helping parents save on taxes
When you are raising a family, it’s not easy to find time for yourself let alone think
about tax planning. Nevertheless, it’s important to find the time to consider these
tax saving tips from RBC®:
Child care expenses, such as daycare, nannies, summer camp, before and
after school programs, are eligible for a deduction against income. The claim
amount is the actual cost of expenses, up to a specific dollar amount, which is
claimed by the parent with the lowest tax return.
The Child Amount Tax Credit allows you to claim a tax credit on your income
tax return based on an amount of $2,089 for each child under the age of 18. This
can also be applied against tax deducted at source by your employer.
The Children’s Fitness Amount Tax Credit entitles you to claim a credit based
on up to $500 per child, to cover costs of enrolling the child in a qualifying fitness
program. You need to have made the payments on or before Dec. 31, 2009, to
claim the credit on your 2009 tax return.
A Registered Education Savings Plan is an excellent way to save for a child’s
post-secondary education costs. It is also an investment that allows for deferred
taxes until the funds are withdrawn. Furthermore, it is the student who is taxed
upon the withdrawal of any income and government grants, and not the parents.
The benefit here is that the student is typically in a lower income tax bracket and
receives their basic personal amount tax free.
The material in this Fact Sheet is intended as a general source of information only, and should
not be construed as offering specific tax, legal, financial or investment advice. Every effort has
been made to ensure that the material is correct at time of publication, but we cannot guarantee
its accuracy or completeness. Interest rates, market conditions, tax rulings and other investment
factors are subject to rapid change. Individuals should consult with their personal tax advisor,
accountant or legal professional before taking any action based upon the information contained in
this Fact Sheet.
Financial planning services and investment advice are provided by Royal Mutual Funds Inc
(RMFI)., RBC Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of
Canada, The Royal Trust Company and Phillips, Hager & North Investment Management Ltd. are
separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the
province of Quebec.
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