A RESP account allows you to set aside funds for a child or grandchild’s education, where the growth and income is not taxable – and! – the government will contribute to the RESP with a tax-free grant equal to 20% of your contribution. The limit for 2014 is $2500 per child, plus the ability to make up for one missed year. While there is no tax deduction for the contributions, RESP’s are still worthwhile because of the 20% grant. When the funds are withdrawn for a child’s education, they are taxed in the child’s hands, generally at a low rate (or no tax at all).
Canadians are living longer than ever before, and the average Canadian reaching the age of 65 in 2013 can expect to live until age 87, which is about five years longer than the life expectancy of the average 65 year-old in 1970. Many retirees face the challenge of stretching their retirement savings over a longer lifespan than their parents and grandparents did.
The Financial Consumer Agency of Canada has put together a website addressing financial concerns of retired people. The website is called “Living in Retirement”. Check it out at:
You may be able to claim the family caregiver amount, if you have a dependent child with an impairment in physical or mental functions. The impairment must be prolonged and indefinite, and the child must need much more assistance for their personal needs and care compared to children of the same age. You must have a signed statement from a medical doctor showing when the impairment began and what the duration of the impairment is expected to be.
This credit was new for the 2012 taxation year. If you have a special needs child, ask us how you go about claiming this credit for 2012 and subsequent years.