Evelyn Jacks: Back to school tax tips

Did you just drop a bundle on school supplies, ballet shoes and hockey gear? Pressure from the precious ones can be daunting at this time of year, especially if those after-school activities are not negotiable. Fortunately, tax relief is possible if you keep the right receipts. So, take a few moments now to make some notes and file your tax receipts.

ï Children's Fitness Tax Credit: This federal credit recognizes eligible expenses for sports and fitness activities in which your child participates up to a maximum of $500 for each child under the age of 16. (Parents of a disabled child under 18 can claim more.) A number of activities qualify, including sailing, bowling and golf lessons, as well as hockey and soccer.

ï Children's Arts Tax Credit: If your child participates in artistic, cultural, recreational or developmental activities, you can qualify for this federal tax credit which offsets the costs of participation. Costs of instruction, equipment, uniforms, facility rental and administration costs included in the registration or membership fees all qualify for the credit. It covers music, language lessons and the literary, visual and performing arts.

ï Child-Care Expenses: Do no despair if the day camp in which you enrolled your little ones this past summer while you and your spouse worked does not qualify for the fitness or arts credit. Those camp costs may qualify for the deduction for child-care expenses ó which gives you more bang for your buck. To claim child-care expenses, however, both parents must generally be working or in school. If an activity qualifies for both the child-care deduction and the fitness or arts tax credits, it must be claimed as a child-care expense.

ï Canada Child Tax Benefits. Child-care expenses reduce net income (line 236 of your tax return) and refundable tax credits are calculated on your net income. So, when you maximize your child-care expenses, you increase your possible Canada Child Tax Benefit, which generally must be claimed by the lower-income spouse.

ï Medical expenses. The costs for private health-care insurance that are not reimbursed by your benefits plan, glasses, braces, sports medicine, travel to health-care services not available in your local community and a host of prescription drugs qualify as medical expenses on federal/provincial tax returns. To make the most of this deduction, combine all the family's expenses for the preceding 12 months and have the lower-income spouse, assuming he or she is taxable, claim the expenses.

ï Public transportation. Don't forget to save those transportation travel passes for a federal non-refundable tax credit of 15% of your monthly expenditures. One parent can claim the travel pass costs for the whole family.

It's Your Money, Your Life. An increased tax refund is your ticket to fast cash down the line, which is important, because any tax savings you can find will help with the financial challenges of your children's post-secondary education. With the right education and skills, your children will be financially set. Then, you can focus without guilt on your luxury retirement.

Evelyn Jacks is president of Knowledge Bureau, which features "back to schoolî courses for parents who want better financial education and career opportunities in the tax and financial services. Click here for details.