Congratulations on the arrival of your little bundle of joy! Life with a new baby can be a bit chaotic, and amidst all the tiny socks and sleepless nights, it’s important to consider how to simplify your taxes may be affected. Here are a few steps you can take now to ensure a smooth tax experience in the future.
Simplify Your Taxes: Making your taxes easier after having a baby!
Life is suddenly filled with tiny socks, little toques, and sleepless nights. While taxes might not be your top priority, there are a few things you can do now to ensure a smoother tax experience down the road. Here are four ways to make your taxes easier:
Notify the Canada Revenue Agency (CRA) about your baby:
Most hospitals provide the necessary paperwork to register your baby with the CRA. Registering your baby triggers the Canada Child Benefit (CCB), which provides financial assistance for raising a child. Make sure to complete a tax return to receive the CCB based on your income.
Obtain a social insurance number (SIN) for your child:
Even though your baby won’t be entering the workforce anytime soon, it’s important to apply for a SIN as soon as they are born. You’ll need it to open a Registered Education Savings Plan (RESP).
Open an RESP:
An RESP is an excellent way to save for your child’s education, and the government provides additional incentives. Parents can contribute up to $50,000 over their lifetime, and the government matches a portion of your contributions through the Canada Education Savings Grant (CESG). Your child can use the funds when they pursue post-secondary education.
Check eligibility for the Canada Learning Bond (CLB):
Lower-income families may qualify for the CLB, which provides $500 at birth and an additional $100 per year until the age of 15 for children whose families are entitled to the National Child Benefit Supplement.
Life with a baby brings many changes, but the CRA offers support for new parents. Make sure to take advantage of benefits such as the CCB, RESPs, and potential deductions for childcare expenses. Stay informed and make the most of your new tax situation.
