TAX ALERT

Warning: Investing in schemes that promise you tax free withdrawals from RRSPs and RRIFs could result in the loss of your retirement savings

The Canada Revenue Agency is finding an increasing number of questionable registered retirement savings plan (RRSP) and registered retirement income fund (RRIF) tax-free withdrawal schemes. The CRA is warning that investing in such schemes could result in you losing your entire retirement savings to unscrupulous promoters, as well as a reassessment of your tax returns.

Questions and answers

What is the maximum amount of child care expenses I can claim? Up to $7,000 per child or up to $10,000 if your child is disabled.

During the summer I pay my 14-year old daughter to look after her little brother while my husband and I work. Can I include this on my return as a deduction? Since the child care services are being provided by a person under 18 years of age who is related to you, you are not entitled to make a claim for child care expenses. When child care services are provided by an individual, the individual cannot be the eligible child's father, mother, or a supporting person

My husband will have to pay a lot of tax this year. Can he claim the day care expenses instead of me? Generally, the person with the lower net income (including zero income) must claim the child care expenses. However, if your spouse or common-law partner has the higher net income and one of the conditions below apply, he can make the claim for child care expenses.
(a) You are enrolled in an educational program that is offered by a secondary school, college, university, or other designated educational institution.
(b) You were not capable of caring for children because of a mental or physical infirmity.
(d) You were confined to a prison or similar institution for a period of at least two weeks; or
(e) You were living separate and apart from your spouse or common-law partner at the end of the year and for a period of at least 90 days beginning in that year due to a breakdown of your relationship,

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