Five Reasons All Parents Should Have An Accountant

Being a parent is most likely the hardest job you’ll ever have. The hours are long, the pay sucks, and your tiny boss probably acts like a tyrant.

Parents also often feel like they’re expected to do it all. From the exhausting newborn days through to the demanding teenage years, taking care of kids requires wearing a great many hats.

But just as you’d consult a doctor for a medical concern or a teacher if you’re worried about your child’s reading, you should consult a financial expert when it comes to money management. Accountants have valuable skills to teach families and will also ensure you’re maximizing the tax incentives and grant opportunities that apply to you.

Here are our top five reasons we think having an accountant isn’t just a luxury for families, but a necessity:

1.You won’t miss out on benefits

Canadian families can access valuable benefits if they have children under age 18. While some are specific to certain needs, others are intended to help generally with the costs of raising children.

The Canada child benefit (CCB) is available to all parents. It’s a non-taxable benefit you can receive as long as you file your income taxes annually. In cases of separation or divorce, the parent with custody receives the CCB unless it is split according to a custody agreement.

There are various other benefits that may apply to families as well, like the Canada Dental Benefit and housing benefits(including a one-time top up for low-income renters until March 31, 2023).

Depending on where you live, you might also be eligible for various benefits at your provincial or territorial level. For instance, Alberta offers families a tax-free child and family benefit, adjusted for family net income.

2.Your tax burden will be reduced

Often, families miss out on tax credits because they aren’t aware of eligibility or they aren’t able to produce proper documentation come tax time. Having an accountant identify these opportunities early will ensure you’re able to capture any and all tax advantages you have.

For instance, you can claim medical expenses on your tax return. Expenses incurred for children under 18 are also eligible. The list of inclusions is lengthy and extends well beyond prescription drugs. Check out the Canada Revenue Agency’s allowable expenses and be sure to keep all of your receipts and documentation to provide to your accountant.

Childcare expenses are also eligible for a deduction. This could include caregivers, nannies, daycare centres or nursery schools, or even some camps. Additional deductions apply if your child has a disability. If you’re a single parent caring for a dependent who needs more help for personal needs and care than other children of the same age, ask about the eligible dependent tax credit.

It’s possible you’re also missing out on other tax credits, like ones for adoption expenses or post-secondary tuition payments for older children. Consult an accountant to identify and maximize these opportunities.

3.You’ll maximize grants for education savings

Saving for post-secondary education can feel like a tremendous burden for families. There are incentives to start saving early with a Registered Education Savings Plan (RESP). This savings plan can be set up for one or more beneficiaries, meaning that you can create one plan for your entire family.

The Canada Revenue Agency sets out contribution limits, which are not tax deductible, but when your child eventually withdraws funds, it’s considered their income. They’ll only pay tax (within their own tax bracket) on the increase, not the original contribution amount.

Having an RESP allows you to receive the Canada Education Savings Grant. The grant contributes an additional amount of 20% on the first $2500 contributed annually, as well as an additional amount on the first $500 dependent on adjusted family net income. It's available until the calendar year in which your child turns 17, with contribution room carried forward.

Low-income families can receive an additional boost to their education savings through the Canada Learning Bond, up to $2000.

Excess contributions are subject to a monthly tax rate of 1% and there are some limitations on when the RESP must be initiated, so it’s a good idea to seek expert advice early.

4.You can’t really do it all

While parents may feel like they’re expected to take care of everything, the truth is that that isn’t possible. Seeking professional guidance on a variety of issues is part of the job.

An accountant is skilled at minimizing your tax burden. They’ll devise a plan that gives you confidence you’re capturing rebates and maximizing opportunities for grants. Over 18 years, this can amount to significant savings that you can reinvest in your family’s welfare and success.

Getting expert financial advice is also time-efficient, and the expense may be considerably less than you’d expect. Filing your own taxes is a time-consuming job that can take your focus away from your family or cost you valuable hours that you could instead be working. If you account for lost income, you may find that having your taxes done professionally actually saves you money.

5.It’ll help you teach good money management

Modelling healthy behaviours around finances will help you give your children a solid foundation in money management. You can lead by example by valuing the advice of experts and investing your time in creating a budget and a financial plan.

Take the time to talk to your children about how money works. They should understand the difference between debits and credits, money in (income) and out (expenses), and wants versus needs. You can visit a bank together to open a savings account, then set a family goal for saving towards something of importance. If your teenager wants to buy something they can’t afford, consider charging interest on a loan to teach them that delaying gratification can mean paying less for an item in the long run.

If you have a healthy relationship with your own money, your children will be more likely to grow up with good money sense. Gain confidence in your own financial planning with the help of expert guidance from an accountant so you’ll not only be more prepared to finance their future, but also to have open discussions and model healthy behaviours at home.

Being a parent can be challenging, but there’s help available. Start today by making sure your family’s future is secure with the expert advice of a chartered professional accountant.