Tax Planning For The Arrival Of The New Little One
Now that you have mastered your tax responsibilities as a couple and you now have a new little one on the way, you also are going to have the extra responsibility of determining how your taxes have to be done in relation to the new baby.
Once the baby has arrived and you are registering the birth you might want to take advantage of the automated benefits application. What this will do is allow you to apply for the child tax credits at the same time you are doing the registration.
Presently this will allow you to apply for the Canada Child tax benefit and the Universal Child care benefit and at the same time the baby will also get registered for the goods and services harmonized sales tax credit. This is only applicable to those provinces that are participating in this. You may not be aware of just what the benefits are that are going to be available to you now as a new parent.
You should be eligible to receive the Canada Child tax a benefit which is a monthly payment that will be made to you that is tax-free until your child reaches the age of 18. Presently there is the Universal Child care benefit although there are some indications that this may change in the future. With this benefit it is a taxable benefit and during the 2015 year tax year families that were eligible for this credit will receive $160 per month for children under the age of six, and then it drops down to $60 per month for each child from the age of six up to 17.
These are monthly payments that parents receive. You may also be able to claim the working income tax benefit which is applicable to low income families. This is a refundable tax credit and now that you have a child that is an eligible dependent you now may be able to claim this credit.
Something else that you want to check out for the new baby is the registered education savings plan that allows you to start saving money now for the future of your little one. This is a something that is really going to be beneficial in helping to offset the education costs that your youngster will be facing in the future.
As a new parent or soon to be new parent you may want to discuss what the changes in your tax situation are going to be with your accountant.