8 Things That Parents Should Talk to Their Accountant About
Being a parent is the thrill of a lifetime, and we know how much you value your family, but raising children can be stressful and expensive. Did you know that it costs an estimated $234,656 to care for a child over the span of 18 years? That doesn’t even include post-secondary education! But rest assured, a BVA accountant can help you plan for your family’s future.
Many parents are unaware of the benefits and programs that are designed to make their lives a little easier. Here are a few things you should consider when planning for little ones:
The Registered Education Savings Plan is a great way to save and plan for the new addition’s education. These registered accounts allow tax sheltered growth, possibility of government contributions and can be very flexible.
2. Medical Deductions:
Keep in mind that medical expenses can be grouped as a family total to be claimed as a deduction on your income tax return. In addition, this can include medical costs associated with invitro fertility programs.
3. Canada Child Benefit (CCB)
Do not forget to register for the program when the new baby is born. This is a tax-free payment that could be received from the government. Every family situation is unique as the eligibility for the payment is based on the family net income. The maximum benefit for the July 2019 to June 2020 period is $6,639/year per dependent under 6 and $5,602/year per dependent aged 6-17.
4. Child Disability Benefit
If your child has a disability there is additional support from the CRA that can be received. An additional $2,832/year per dependent could be received on top of the Canada Child Benefit (CCB).
The Registered Disability Savings Plan (RDSP) functions as a savings account for the disabled individual. The plan can receive additional government contributions in 2 potential forms:
a. The Canada disability savings grant:
i. Maximum of $3,500 in matching grants per year and up to a maximum of $70,000 over the beneficiary’s lifetime.
b. The Canada disability savings bond:
i. Depending on income level a bond of up to $1,000/year and a lifetime maximum of $20,000 may be received.
6. Child Care Expenses:
Keep in mind that child care expenses can be used as a deduction on your tax return. These can include caregivers, day nursery schools, daycare centres, day camps (primarily for care of children), and many other possibilities.
7. Cash Value Life Insurance:
Life Insurance on a new born can be a morbid topic. However, there are other benefits that an insurance policy can provide. There is potential to have a policy that builds a cash value. When the newborn grows up the accumulated cash can be used to be borrowed against for school, a first car, down payment on a new house.
8. Update your will:
It goes without saying but having a newborn should make getting a will or revising your old one a top priority. This will help solidify your new family and make sure that the correct beneficiaries are named.
We want to be clear that we are not health insurance salespeople or investment advisors; our goal is only to support you, your family, and your business in becoming more resilient and sustainable. With a little proactive planning, we can help maintain and build your family’s financial success. Please reach out to your BVA accountant for a conversation about your family’s future!