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RESP babies

MoneySense posted a short article on the number of students who now wish they had an RESP (registered education savings plan).

We will be writing a post regarding the tax implications involved when you withdraw those funds.

From MoneySense:

A new poll for BMO suggest one-third of Canadians enrolled at a post-secondary institution have an RESP to help pay for tuition, books, room and board. Among students with a RESP to tap, three-quarters said they would not be able to afford university/college without it. Among students without an RESP, a whopping 84% said they wish they had one and 91% said they plan to set one up for their kids one day. It’s no wonder. A four-year university degree can cost upwards of $60,000, according to the bank. For children born in 2013, costs could reach $140,000 by the time they attend a post-secondary institution. Pick up the September/October issue of MoneySense magazine on newsstands now for additional information on students and RESPs or try out our RESP Calculator.

Back to school! Save your receipts!

This is from CRA’s website. Check out their website for more information.

Did you know?

If you’re moving for school this year you may be able to claim a tax deduction for moving expenses when you file your income tax and benefit return. You may also be able to claim a non-refundable tax credit based on the cost of your transit passes. So don’t forget to keep your receipts!

In addition, there are other benefits and non-refundable tax credits that students may be eligible to claim. Non-refundable tax credits reduce your federal tax; however, if the total of these credits is more than your federal tax, you will not get a refund for the difference.

  • Education amount: You may be able to claim a full-time education amount of $400, or part-time amount of $120, for each month or part of a month in the year in which you were enrolled in a qualifying program at the post-secondary level.
  • Textbook amount: You may be able to claim a textbook amount for each month that you qualify for the education amount.
  • Tuition amount: You may be able to claim the fees you pay for the courses taken at the post-secondary level or at an educational institution certified by Human Resources and Skills Development Canada. To qualify you must have paid more than $100 in tuition fees for the year.
  • Interest on student loans: You may be eligible to claim an amount for the interest paid in 2012 or the preceding five years on your student loan if you received it under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or a similar provincial or territorial government laws.
  • Goods and services tax/ harmonized sales tax (GST/HST) credit: The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low or modest incomes offset all or part of the GST or HST that they pay.

Keep your receipts!

It is important for Canadians to keep all their records and receipts after filing their income tax and benefit return in case the Canada Revenue Agency (CRA) asks to see them later. Each year, the CRA looks at income tax returns to review deductions and credits and ensure that various income amounts have been correctly reported. Keep your receipts and supporting documents for six years.

For more information for students, go to www.cra.gc.ca/students.