Still, Golombek insists the Child Care Expenses Deduction is the best remaining option for working parents, now that the income-splitting Family Tax Cut is gone, and arts, fitness and textbook tax breaks are off the table.Įach child’s age-based deduction limit is pretty straight-forward, $8,000 for children six and under, and $5,000 for children between seven and 16 years old. “The government has eliminated most of the tax deductions and credits that are available on the return, and have replaced a lot of the benefits with this non-taxable Canada Child Benefit, which you receive tax free on a monthly basis.” Really, the only thing that’s left for most people is the Child Care Expenses Deduction,” he told CTVNews.ca in an interview. “Most of the tax benefits that are accruing to parents in 2017-2018 are coming from outside the tax-return system. In a two-parent household, only the lower-earning parent qualifies, and only if they have an earned income of $11,635 or more in the 2017 tax year. To qualify for the Child Care Expenses Deduction, parents must have children under 16 years old. Just seven per cent of respondents to a survey by TurboTax conducted before Canadians filled out their 2016 tax returns last spring said they planned to claim the deduction for $8,000 in child-care expenses for children six and under, and $5,000 for children between seven and 16 years old.įor Jamie Golombek, CIBC’s managing director of tax and estate planning, the figure is evidence of the small pool of Canadians eligible to claim child-care costs on their federal income tax return. But experts say parents may not be taking full advantage of the Child Care Expenses Deduction, which could be the most valuable option. Oftentimes, parents buy children items, only to realize what they really value is experiences, Broadway said.With the income-splitting Family Tax Cut, arts, fitness and textbook tax breaks now off the table, Canadian working parents are nearly out of opportunities to deduct child-care costs on their tax returns. This year, I'm cutting costs by making better use of free activities. There were so many toys in my house by the end of 2022 that my son and I gave half away. I can now roll that money over into the new year. The cherry on top is I had $1,500 left over thanks to my employer's contributions to my HSA account. Since my son and I went to the doctor a handful of times that year, my out-of-pocket costs came to just about $700. Keep in mind that with these plans, you may end up paying a higher deductible before your insurance starts sharing health care costs with you. High-deductible health plans sometimes have lower premiums, which leads to some people saving money. You must have a high-deductible health insurance plan to contribute to an HSA. The contributions are made with pre-tax dollars and are also tax-deductible. The limit for HSAs in 2023 is $3,850 for individuals and $7,750 for families. HSAs can be used to pay health care expenses. If you have a relatively healthy child and can say the same for yourself, think about whether a health savings account could save you money. Adding copays every time you visit the doctor increases your out-of-pocket costs even more. Premiums can become a noticeable expense when you pay them monthly. Over time that actually does add up," she said. "You'll be surprised, the difference can be pretty large - sometimes 40, 50 bucks difference just because of delivery fees and the inflated prices. Dominique Broadway, a personal finance expert and founder of Finances Demystified in Miami, Florida, switched from going to the store to using grocery delivery services so she knows exactly how much she'll spend. One cost-saving strategy is to plan your shopping ahead of time to avoid buying items you don't need. 3 tips for stretching your dollar at the grocery store.As Davos kicks off, Oxfam calls for tax on food companies to reduce inequality.This may especially be the case if you're feeling the effects of higher food costs due to inflation. If your snack cupboard is empty within three to five business days because your kids have bottomless bellies, then you may be looking for ways to reduce your grocery bill. You can contribute $ 5,000 per household to a dependent care FSA in 2023, or $2,500 if you're married filing separately. Bell suggests maxing out that account for the year and also utilizing an employer FSA match if your company offers one. Record number of employees taking off work for sick kids 04:31Īdditionally, you could contribute to a dependent care flexible savings account, which allows you to use pre-tax dollars to pay for child care.
0 Comments
Leave a Reply. |