Well, we are in the midst of back-to-school week. For parents it seems like everyone has a hand or two out asking for money...
$75 for school supplies. $500 for text books. $25 for student activity fee. $60 for the yearbook. $200 for the latest smartphone. Ugghhh!
It's not all bad news, however.
Earlier this week, we told you about the tax savings available to you when your children are small.
Today, let's expand that list of money saving opportunities. Here are the best ideas for when your children are high school and post-secondary age.
The Teen and University Years
Even when your children become high school-ers, you're still able to claim the Fitness and Arts tax credits we mentioned earlier this week. Once they hit sixteen years of age, however, the credits are no longer available.
If your children need to take public transportation to get to and from school, you’ll be able to take advantage of the Public Transit Tax Credit.
This is a 15% non-refundable tax credit on the cost of monthly public transit passes, and passes of longer duration for travel within Canada on public transit.
Once your children hit university, a whole other set of tax saving opportunities become available.
Students can claim tuition fees paid to a university, college, or other educational institution in Canada for courses taken at the post-secondary level.
Tuition fees paid for courses certified by Employment and Social Development Canada to develop or improve skills in an occupation also qualify.
The federal tax credit is worth 15% of the tuition paid. So a $5,000 tuition fee would produce a tax credit that would cut a student's federal tax bill by $750.
In addition to tuition fees, students can claim an education amount of $400 for each whole or part month in the year in which they're enrolled full-time in a qualifying educational program, or $120 per month for part-time enrolment in a specified educational program, at a designated educational institution.
Students can claim a textbook amount of $65 for each month where they qualify for the full-time education amount or $20 for each part-time month. The actual amount spent on textbooks is irrelevant.
Tax Exemption for Scholarships, Fellowships and Bursaries
This exemption provides that certain post-secondary scholarships, fellowships and bursaries received in connection with a student’s enrolment in a program that qualifies for the Education Tax Credit may be fully or partially excluded from income.
Elementary and secondary school scholarships and bursaries are not taxable.
Student Loan Interest Tax Credit
This credit provides a 15% non-refundable tax credit on interest paid on loans for post-secondary education received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or a similar provincial or territorial government law.
It's important to make the loan through one of these qualifying federal or provincial student aid programs. Getting a cash advance on a credit card or a regular loan through your bank won't qualify.
Sadly, other important education-related expenses, namely, cold pizza and Kraft dinner are not deductible.
Want more information? Give FBC's tax experts a call.