MONTREAL - One of the biggest challenges for families with children at tax time can be locating all of the pesky receipts they've stashed away over the year, hoping to claim credits and deductions.
“Keeping receipts, it's the big deal,” said Cleo Hamel, senior tax analyst with H&R Block Canada.
“Do you have an envelope? Do you have a box? As they come in, you just throw them in there,” Hamel said from Calgary.
But she cautioned that it has to be a receipt that says “Paid,” and not just a bill or Visa credit card statement.
The kids' swimming lessons, after-school care, the expense of teeth-straightening braces and RESP contributions for post-secondary education - all qualify as deductions.
But parents aren't always sure what to claim.
A recent RBC survey suggested that four of every 10 parents with children under the age of 12 weren't taking full advantage of tax savings available to them.
RBC Investment and retirement planner Patricia Domingo said deductions like summer camps can get overlooked by parents due to the “everyday busy schedules of families.”
The poll also found that 51 per cent of those surveyed didn't have registered education savings plans for their children, but most of these parents would like to contribute to this plan.
Even putting aside a small amount can lessen the cost down the road, Domingo said from Toronto.
“The goal doesn't have to be all or nothing,” she said.
“Sometimes that's how families tend to view it. They feel that the goal is perhaps not attainable at the time, so they shelve it.”
The federal government matches RESP contributions by 20 per cent up to annual maximum of $500 or $7,200 over the life of a plan. Additional federal grants are available for lower income families.
Hamel said parents can forget to claim medical expenses, such as glasses, that may not be covered fully or at all by their employer health insurance plans.
“It's still costs out of your pocket.”
There's also a disability tax credit for parents or children who qualify, she said.
And there's the basic child tax credit of $2,089 per child under 18. Hamel said it works out to $313 in tax savings per child and either parent can claim it, but she recommends couples do their returns before applying it to see who can benefit the most from it.
“See what position you and your spouse are sitting at.”
As well, there's the children's fitness credit of a maximum of $500 per child in qualifying sporting activities. Parents and students who use the public transit system for work and school can claim their passes.
KPMG's Paul Woolford advises people to make sure they file an income tax return to be able to get all of the credits to which they're entitled, even if there's no tax owing.
“They all get held up until you file,” said Woolford, tax partner at KPMG Enterprise in Toronto.
Woolford said couples should make sure they're shifting income where possible to the partner who has the lowest taxable earnings.
“So as a whole, the family pays less tax. So that's a saving.”
Those with businesses need to remember they can claim family members who work for them as deductions, he said.
“So when you are preparing your tax return, make sure you look at the schedule that lists them all and make sure, ideally, you're not scrambling at the last minute,” Woolford said.
Hamel said with the economic downturn, some families who have experienced job loss may be entitled to credits they haven't previously received.
“There might be some people who file their tax returns this year who in the past have never received the GST or the child tax benefit who might be surprised to actually qualify for it this year.”