CHILD TAX CREDIT - MY SAVIORS
It’s that time of the year, TAX RETURN, where we are scrambling to find all the receipts for the previous year for all deductibles and expenses. We’ll slowly pull out the 2015 Expenses folder, dump everything on the floor, and stare at them hoping if we stare it long enough, the receipts will organize itself into a pile. Maybe, just maybe they’ll even categorize themselves for us. Wouldn’t that be nice? With the government and policy changes over the past year, few things have changed regarding child tax benefit. The most well-known one is the universal child tax benefit, the minimum amount has increased from $100 to $120 per child per month – woohoo! More money for diapers. However, there are other child tax benefits that could benefit us parents especially with the current economy and how everything is getting expensive at the moment.
Here are few things that will be benefiting my family
Child Fitness Tax Credit – This used to be non-refundable tax credit, but as of 2015, it is refundable. What does that mean? It means if you have any taxes owing, you can use it to apply against the balance. And if you don’t, perhaps you should start planning on how to use this money. The child fitness tax credit is up to $1000 per child under 16 of age. This applies to any physical activities with minimum duration of 8 weeks or 5 consecutive days of camps.
Child Art’s Tax Credit – With my daughter doing arts and piano lesson, this sure helps. However this is non-refundable and up to $500 per child under 16 of age.
Child Care Expenses – attention all working mommy and our romantic night outs. This is for us!! We have $8000 of child care tax benefit per child under 6 of age. Even though it’s only about $667 a month, barely covers the day care cost and only applies to the lower income parent, but this is better than nothing.
Income Split – If you and your spouse are in two different tax brackets, and have at least one child under 18, you are eligible for this. You are able to split up to $50,000 of income or maximum family tax cut of $2000.
Medical Expenses – let’s say you maxed out your company’s benefit plan or your family’s medical expenses is not covered at all, you could benefit from this tax benefit. Its 15% of 97% of your net income or $2208, whichever is less.
What are your methods of maximizing your child tax benefits and cutting taxes back?