Just had a baby, what tax breaks ect are there?

[VladtheImpaler]

Originally Posted by bizaro86

If you get the dowry in advance, do you declare it as income in the year you get the money or the year your kid gets married?

Or is that more of a cash-under-the-table sort of deal?

That's something for our tax planners to determine. Is it a gift? Are you in effect selling your child, and is it a disposition triggering capital gains? I simply don't know.

[bizaro86]

Originally Posted by VladtheImpaler

That's something for our tax planners to determine. Is it a gift? Are you in effect selling your child, and is it a disposition triggering capital gains? I simply don't know.

Hmmm... If it's a disposition, you should be able to take the money you've put into the kid over the years as your adjusted cost base, and then it'd likely be a capital loss.

[Wormius]

Hmm.. What are the legalities of setting up a family business (Chores, Inc.) and paying your kids exactly the amount needed to pay for things like a share of the groceries, their own clothes, toys, books, etc. They could pay taxes at a lower rate, and my wife and I would have less income to declare. Is this feasible, or would I get bogged down by EI and CPP stuff?

I am sure there a million things I am missing, that would probably get me fined or locked up for this.

[albertGQ]

Are you able to claim babysitting if you pay the 14 year old girl in cash? Its like like she's got a babysitting service set up where she can write you a receipt

[Ironhorse]

I was told that you can only claim things like daycare and babysitting if you actually take that time to go to work and earn money. Dinner & a movie probably don't count.

[Rathji]

Originally Posted by Wormius

Hmm.. What are the legalities of setting up a family business (Chores, Inc.) and paying your kids exactly the amount needed to pay for things like a share of the groceries, their own clothes, toys, books, etc. They could pay taxes at a lower rate, and my wife and I would have less income to declare. Is this feasible, or would I get bogged down by EI and CPP stuff?

I am sure there a million things I am missing, that would probably get me fined or locked up for this.

I know you can pay your wife and children fair wages for stuff they do and claim it on your taxes, but I don't know the exact details of how or when it is applicable.

[Wormius]

Originally Posted by albertGQ

Are you able to claim babysitting if you pay the 14 year old girl in cash? Its like like she's got a babysitting service set up where she can write you a receipt

I think you just need to make sure you've got her name and social insurance # and then she'll be obliged to pay taxes on it.

[Rathji]

Originally Posted by Wormius

I think you just need to make sure you've got her name and social insurance # and then she'll be obliged to pay taxes on it.

She will ned to claim it, but unless she is a very industrious 14 year old, she isn't paying much of anything for taxes on it.

[Slava]

Originally Posted by Ironhorse

I was told that you can only claim things like daycare and babysitting if you actually take that time to go to work and earn money. Dinner & a movie probably don't count.

Yeah I seem to recall that the point is to deduct childcare expenses incurred to produce an income.

Originally Posted by Rathji

She will ned to claim it, but unless she is a very industrious 14 year old, she isn't paying much of anything for taxes on it.

Well truth be told my kids will file taxes as early as possible. They won't earn enough to pay taxes, but will generate some RRSP room early. Can't hurt anything.

[Slava]

Ya, it needs to be employment income. Its just that I had a job early, and never filed taxes for years. It just wasn't a concern because I wasn't making enough to bother, but you add that up and I could've had a little more RRSP room for later in life.

I think your kids are quite young, so I have no idea why an advisor would tell you that. Seems silly though.

[yads]

Originally Posted by Ironhorse

I was told that you can only claim things like daycare and babysitting if you actually take that time to go to work and earn money. Dinner & a movie probably don't count.

I wouldn't take any more tax advice from the person who told you that. From the link I posted above

You can claim payments for child care expenses made to:

caregivers providing child care services;

day nursery schools and daycare centres;

educational institutions, for the part of the fees that relate to
child care services;

day camps and day sports schools where the primary goal
of the camp is to care for children (an institution offering a
sports study program is not a sports school); or

boarding schools, overnight sports schools, or camps where
lodging is involved (read the note in Part A of Form T778).

The babysitter would just need to issue you a receipt for the babysitting.

[yads]

Originally Posted by Wormius

Hmm.. What are the legalities of setting up a family business (Chores, Inc.) and paying your kids exactly the amount needed to pay for things like a share of the groceries, their own clothes, toys, books, etc. They could pay taxes at a lower rate, and my wife and I would have less income to declare. Is this feasible, or would I get bogged down by EI and CPP stuff?

I am sure there a million things I am missing, that would probably get me fined or locked up for this.

I'd imagine child labor laws, would prevent you from setting this up.

[Wormius]

Originally Posted by yads

I'd imagine child labor laws, would prevent you from setting this up.

But I'd pay them a fair wage, and they wouldn't actually have to do any real work (it's not illegal to hire people who aren't qualified for their job) - the only stipulation would be that they need to use the money to pay for things like food/clothes/gas/toys/resp/vacations. They don't get taxed on it because I wouldn't pay them more than $14k each, and I reduce the amount I get taxed on. I just wonder if it needs to be a legitimate business of some kind? But still there is something that I feel like I am missing that would nullify any benefits that I would see. Kind of like when Kramer and Newman wanted to take the bottles to a depot in another state.

[bizaro86]

Originally Posted by Wormius

But I'd pay them a fair wage, and they wouldn't actually have to do any real work (it's not illegal to hire people who aren't qualified for their job) - the only stipulation would be that they need to use the money to pay for things like food/clothes/gas/toys/resp/vacations. They don't get taxed on it because I wouldn't pay them more than $14k each, and I reduce the amount I get taxed on. I just wonder if it needs to be a legitimate business of some kind? But still there is something that I feel like I am missing that would nullify any benefits that I would see. Kind of like when Kramer and Newman wanted to take the bottles to a depot in another state.

Yes, or it needs to be tax deductible for some other reason. If you pay your kids a bunch of money for no reason, that's not tax deductible for you. If you pay them a bunch of money to mow your lawn (or whatever), it's not tax deductible for you any more than getting your lawn mowed by someone else would be tax deductible.

If you pay them to work in a legitimate business, then their wages would be a tax deductible expense of that business.

[cSpooge]

Originally Posted by yads

I wouldn't take any more tax advice from the person who told you that. From the link I posted above



The babysitter would just need to issue you a receipt for the babysitting.

Incorrect. From the T778 (Child Care claim form):

Child care expenses
Child care expenses are amounts you or another person (as
described under "Who can claim child care expenses?") paid to have
someone look after an eligible child so that you or the other person
could:
earn income from employment;
carry on a business either alone or as an active partner;
attend school under the conditions identified under "Educational
program" on this page; or
carry on research or similar work, for which you or the other
person received a grant.

[Zevo]

Originally Posted by darklord700

Tax credit on about $2100 (Fed only 15%)
Kids Sports Tax Credit $500 Max (Fed only 15%)
Kids Arts Tax Credit $500 Max (Fed only 15%)
Childcare Deduction $7000 per kid under 6

Talk about nanny state utopia. I sure hope you're not taking part in all this 'government intervention'. It's like they are raising your child for christ sake!

[albertGQ]

Since my wife gets a sitter so she can go to school and work, we are able to claim that expense? We pay her cash so is it just on the honour system?

[Locke]

Originally Posted by fotze

Don't you have to have employment income? My financial advisor recommended we file for our kids but Locke or I couldn't figure out why.

Yeah, that was weird.

Originally Posted by Wormius

Hmm.. What are the legalities of setting up a family business (Chores, Inc.) and paying your kids exactly the amount needed to pay for things like a share of the groceries, their own clothes, toys, books, etc. They could pay taxes at a lower rate, and my wife and I would have less income to declare. Is this feasible, or would I get bogged down by EI and CPP stuff?

I am sure there a million things I am missing, that would probably get me fined or locked up for this.

Theres lots wrong with this. First of all, when dealing with a non-arm's length transaction there are stipulations around fair market rates and qualifications for work. Secondly, it has to be work thats eligible to be written off in the first place, etc.

[Locke]

Originally Posted by albertGQ

Since my wife gets a sitter so she can go to school and work, we are able to claim that expense? We pay her cash so is it just on the honour system?

Yes, as long as your wife is claiming the income and your sitter is as well. If the sitter isnt claiming the income then the feds will throw that bitch in the clink.

Kidding aside; its daycare so a taxpayer can go to work to earn income to pay taxes on, thats the idea. So generally daycare is eligible but 'babysitters' arent.

[albertGQ]

Originally Posted by Locke

Yes, as long as your wife is claiming the income and your sitter is as well. If the sitter isnt claiming the income then the feds will throw that bitch in the clink.

Kidding aside; its daycare so a taxpayer can go to work to earn income to pay taxes on, thats the idea. So generally daycare is eligible but 'babysitters' arent.

The thing is my wife works evenings so she is able to get a babysitter to watch the kids for a bit before I get home. I'm sure she doesn't claim the cash we pay her so I guess we can't use this deduction right?