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Article-Year End Strategies 2007 PDF Print E-mail

Here are some year end financial tips.


Year End Family Strategies

Raising kids for fun and profit

RESP Basics

  • Government matches with 20% CESG on up $2500 per year (was $2000 last year) to max of $50,000

  • Can roll over grant room to max of $1000 per year-to catch up

  •  Receive grant up until year the child turns 18

  •  RESPs can be individual or group plans

  •  Based on calendar year –not like RRSP 

Using RESPs

  • Can run for 25 years

  •  Enrolled in full time or some part time schooling

  • Can be used for anything

  • Three “chunks” of money: contributions, grant money and growth on the money

  • Chunks taxed differently -in child’s name

No RESP-ect?

  • RESP can be collapsed after 10 years

  •  Contributions withdrawn by registrant

  • Growth on money can be rolled into RRSP  or withdrawn and taxed with 20% additional penalty

  • CESG money given back to government

More RESP info

Additional grants on first $500 based on family income:

   Under $37,178  20% (40% total)

   Under $74,357  10% (30% total)

Only $5,000 can be withdrawn in first semester then the whole thing if desired


That’s ACES!

Alberta Centennial Education Savings Plan

    Pays $500 for babies born after 2004 into RESP plus $100 at ages 8,11 and 14-each must be applied for separately

    Needs a minimum $100 invested

Canada Learning Bond

    Canada Learning Bond of $500 for lower income families. (Eligible if you receive the Child Tax Benefit.)

    The receive $100 per year for next fifteen years

RDSP-starting in 2008

    Registered Disability Savings Plan

    Runs until child is 59

    Long term financial security of disabled kids

    Low income matching grants up to 300%

Children’s Fitness Tax Credit

    A nonrefundable tax credit for up to $500 per year

    Up til child is 16

    Program must be at least 8 weeks, or daily for five consecutive days

    Deductibility determined by date paid not when attended

ITF Account

    An informal trust, in adult’s name “in trust for” child under 18

    Can be investment account, savings account etc

    Dividends, interest taxed in adult’s name, capital gains are child’s to pay

    At 18 child controls the account.

Kevin Cork, CFP

December 2007