RESP - Registered Education Savings Plan

RESP “registered education savings plan” provides a great way to save for your child’s university education.

With RESPs, the government provides matching funds for 20% of any contribution up to $2,500 per year up to a maximum of $7,200.

An RESP can be used for any education related expenses and can even be transferred to a sibling if one child opts to forgo a university education.

RESP funds will be taxed upon withdrawal; however, students will be paying taxes only on the interest, dividends, capital gains, and the government’s contributions; their withdrawals directly tied to the contributions made by the parents are not considered taxable income.

Moving Expenses

Did you move to start a new job or to run a business at a new location?

Is your new home at least 40 kms closer to your new place of work?

If the answer is yes, you may be eligible to claim moving expenses.

Here are some of the most common ones:

· Moving cost: Transportation and storage (including the movers, the packing, the insurance..)

· Travel expenses to the new location (vehicle expenses, air fares, meals and accommodations)

· Temporary living expenses for up to 15 days (meals, accommodation)

· Other incidental costs (selling or cancelling lease fees of your old residence)

Full-time post-secondary students may also qualify to deduct eligible moving expenses from their scholarship or research grants income.

To claim the “Moving Expenses Deduction”, complete form T1-M, and keep all your receipts and documents on hand if CRA requests that you provide support for your claim.

Capital Cost Allowance (CCA): What do you need to know?

Capital Cost Allowance (CCA) is the tax deduction for depreciable property (properties that wear over time), such as furniture, equipment, vehicles, computers or even buildings.

Capital Cost Allowance means that when you buy depreciable property, you can’t just claim the entire cost of the property as an expense; instead you have to deduct the cost of the depreciable property gradually over a period of years.

As a rule of thumb, if your purchase is going to provide a long-term benefit, then it is a capital expense and you’ll have to write it off over time, otherwise it is a current expense.

Depreciable property is organized into different classes by the (CRA) Canada Revenue Agency and the CCA class a property is in determines how much CCA you can claim on that property. Equipment for instance fall into Class 8, with a CCA rate of 20%.

For most depreciable properties, CCA is limited to half its cost on its first year (called the half year rule). This half-year-rule also applies when you transfer personal property into your business.

Also, you don’t have to claim the whole amount of CCA you are able to deduct in any given year. You can claim all of it, none of it, or a portion of it, and the rest will be carried over and available to you in the next tax year – very handy if you have a low income year and don’t need to take your CCA deduction at that time.